March 2025

Block Grants

A Framework for States’ Response to Potential Flexibility in Federal K-12 Education Funds

Alex Spurrier, Biko McMillan, and Jennifer O’Neal Schiess

Note: This memo reflects federal policy developments through March 17, 2025. Bellwether will continue monitoring the Trump administration’s actions on federal education funding and update this as necessary.

Summary

The Trump administration may push for a shift away from the current formula-driven federal K-12 education funding toward more flexible block grants — part of a broader effort to significantly scale back the U.S. Department of Education and direct more education policy decision-making to the states.1 If Congress authorizes this new flexibility, state leaders and policymakers must be prepared to use it wisely in service of students and schools.

The concept of block granting could be straightforward from a federal accounting perspective but would present new challenges and opportunities for state policymakers. While it would not likely provide states with more overall federal funding, block granting could give states much more flexibility on how they spend their funding. The degree of that flexibility, however, is an open question.

This memo anticipates key policy questions and options state policymakers will need to consider if Congress converts federal education funding to block grants — with a focus on ensuring that federal funds continue to target support to marginalized students (e.g., multilingual students, students with disabilities, students from low-income families). It is not an endorsement of this funding approach, nor does it try to predict exactly how Congress will implement it.

If state policymakers are granted broad authority to allocate federal education funding, they must ensure that those dollars continue to target supports for marginalized students. This memo explores how different allocation choices could give states more or less control over the use of funds but does not dig deeply into the details of how states could use that control to drive K-12 programmatic decisions at the local level. Readers should not interpret the choice to focus on questions of allocation first as an implication that the use of funds is less important. In fact, if states do get substantial flexibility to direct both the allocation and use of funds, there is real opportunity for states to better allocate funding to benefit students and real risk that funding is diverted in ways that harm students who most need the supports these funds currently provide.

If the Trump administration and Congress shift major federal K-12 funding programs to block grants, key considerations for state policymakers will include:

  • Determining options for distributing block-granted funds and weighing their costs and benefits, such as:
    • Maintaining current federal formulas at the state level.
    • Integrating block grants into existing state funding formulas.
    • Developing new formulas based on priority student needs.
  • Aligning funding mechanisms with student needs, focusing particularly on marginalized students.
  • Providing sufficient guidance and guardrails on the use of funds to maximize efficacy and protect students in the absence of federal requirements.
  • Addressing oversight mechanisms to balance flexibility with accountability.

 

Types of Federal Grants


Discretionary Grants:
Funding appropriated to executive branch agencies through legislation with broad authority for agencies to administer grants to third parties.

Formula-Driven Grants: Funding that includes statutory language on how it should be distributed to grantees along with requirements for how funding can be used.

Block Grants: Funding that is distributed to states by statute with minimal constraints on how that funding can be deployed to achieve a specific outcome.

 

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