Education companies are weathering a wave of Washington, D.C.-induced disruption.
A little more than 100 days into President Donald Trump’s second term, the K-12 market has been tossed into upheaval by abrupt cuts to hundreds of millions of dollars to federal education programs — with the prospect of even more significant reductions to come.
The changes have left many school districts in a state of confusion. And education vendors are responding to the new reality in a variety of ways: from communicating more with districts to exploring expansion plans in state markets to introducing new products.
In a new survey of 400 K-12 business officials, EdWeek Market Brief asked them what strategies they’re rolling out in response to Trump administration policies to try to position themselves for growth.
The results of the online survey, conducted by the EdWeek Research Center in March and April, provide insight into how the ed-tech sector is attempting to strategize and help the district customers who buy their products and services find a way forward, in a climate of nearly unprecedented unpredictability.
About This Series
EdWeek Market Brief’s series of stories uses original surveys of K-12 leaders and education company officials – surveys conducted by the EdWeek Research Center – to explore the impact of Trump administration policies and proposals on school district demands for products and services.
Explore the Series
The survey also takes a step back and ask K-12 business leaders about the biggest pressures they’re facing in the Trump era so far — in funding, dealing with staffing turnover in school systems, and other rapid changes.
How are educational companies trying to position themselves for success, while navigating the tumult?
Half of those surveyed — exactly 50 percent — say they are doing general outreach to districts to ask what support they need.
More than a third of respondents, 34 percent, say they’re conducting a different kind of district outreach: Directing schools system clients to new sources of funding other than federal sources.
And almost an identical number of respondents, 35 percent, say they’re taking steps to try to grow their business, by seeking to expand in new state markets. About one in three respondents, 32 percent, say they are introducing new types of paid products.
Another 29 percent of companies say they are resorting to one of the most drastic moves possible in response to current K-12 market turmoil: They’re trimming staff.
Cross-tab data show that of those K-12 business officials whose companies are reducing headcount, a slightly higher portion, 34 percent, provide content/curriculum development services and 35 percent provide professional development.
Beth Rabbitt, CEO of The Learning Accelerator, a nonprofit that partners with ed-tech vendors, districts, and state and local education agencies to help them develop ed-tech tools, content and professional development, said some of those strategies make a lot of sense, given the tough business climate for ed-tech vendors.
For starters, she recommends companies approach their work with districts more than ever “from a partnership lens.”
Staying in close touch with existing district clients in instances where a company’s product is producing results can be a good thing, Rabbit said. But that shouldn’t mean blowing up a district official’s phone or inbox with a slew of new pitches, she said.
There were lessons learned during the pandemic, Rabbit said, about education companies ramping up outreach when school districts were already overwhelmed: It often didn’t make K-12 leaders more responsive — and in some cases it turned them off.
And unlike during the pandemic, when school systems were riding multiple waves of federal emergency funds and were desperate to buy digital learning tools, many districts nowadays are simply trying to figure how out to fund existing programs and technologies.
In some cases the best approach now will be tamping down aggressive pitches and “going deeper with the clients and the relationships that they have already,” Rabbitt said, where vendors already have “visibility and quality.”
That education companies are looking to expand their footprint in state markets seems like a wise move, she said.
It’s possible that more federal dollars will be redirected through states, which will have greater authority over how that money is distributed, she said. (Others have speculated that states will be forced to spend even more money on K-12, if the federal government pulls back.
But Rabbitt was cautious about education companies rolling out new paid products during the ongoing disruption. Making promises to deliver on products that are not at your core competency can backfire if a company can’t support them, she said.
The survey not only shows which strategies company officials are embracing — but which ones they seem to be rejecting at the moment.
Only 7 percent of respondents, for instance, say their companies are planning to offer districts the right to renegotiate existing contracts, in an attempt to position their companies for growth.
The reluctance of education companies to rework existing deals stands in sharp contrast to the kinds of support that district and school leaders appear to want.
Survey data collected by EdWeek Market Brief from K-12 leaders — to be published in a forthcoming installment in this Exclusive Data series — reveal that renegotiating contracts is a strategy that those administrators hope vendors currently working in their school districts will offer, as a strategy for dealing with the ongoing upheaval.
The survey of K-12 businesses also finds that a relatively small portion of respondents, 13 percent, say they will effectively cede ground, by phasing out their reliance on federal contracts.
And just 14 percent say they are changing how their products and services cover or approach diversity, equity, and inclusion. The Trump administration has vowed to eliminate educational programs that run afoul of its preferred restrictions on DEI.
And an even smaller number of respondents, 5 percent and 4 percent respectively, say their company is either scaling back internal efforts focused on DEI or curtailing resources for districts focused on those topics.
“It’s heartening to me to see that folks aren’t necessarily complying in ways that undermine that commitment,” to DEI, Rabbitt said.
Primal Fear: Funding
The survey of K-12 businesses also asked a fundamental question: What recent developments in the policy landscape do education company officials believe will have a significantly negative impact on the K-12 market over the next year?
Unsurprisingly, the overwhelming majority — 90 percent — pointed to federal education funding. The second-largest response, 65 percent, was reductions to federal research and evaluation.
Since taking office, the Trump administration has used an axe to chop federal investments for K-12 schools, and raised the prospect of cutting funding streams in even more fundamental ways.
Over the past few months the administration has terminated hundreds of grants and contracts supporting teacher preparation and education and research; nixed the ability of districts and states to spend hundreds of millions of dollars in pandemic relief funds; and threatened to withhold a pivotal source of federal funding — Title I money — to school districts that don’t comply with the White House’s preferred restrictions on DEI practices.
Sara Kloek, vice president of education policy for the Washington, D.C.-based Software Information Industry Association, said those top two results show a “resounding response” from business leaders in the ed-tech sector about the underlying disruption resulting from policies coming out of Washington.
Businesses thrive on certainty, she said, and over the last couple of months there’s been very little of that, “whether it’s tariffs or changes at the Education Department or cuts to federal research and evaluation.”
Rabbit, the Learning Accelerator’s CEO, said those research dollars provided funding for school districts to develop multi-year partnerships with entities for services that oftentimes included professional development.
One of the other major concerns for K-12 business officials over the next year: Turnover of district personnel, which was selected by 60% percent of respondents.
Nearly as many education company representatives, 58 percent, say inflation is set to have a significant impact on their business over the next year.
Meanwhile, 56 percent of respondents predicted that school district attendance and enrollment challenges will have a negative impact on the market over the next year; and 38 percent pointed to school closures.
Strikingly, only 18 percent of respondents say trade restrictions and barriers to working internationally will be a significant blight on the K-12 market over the next year. But of those respondents, 30 percent are companies that provide software or technology development, according to the survey.
Many ed-tech vendors have products delivered via software or the Internet, and most likely wouldn’t directly be impacted by new tariffs on imports. However, some education companies rely on components manufactured in other countries, which could be subject to Trump’s new policies.
Kloek, of the SIIA, said even if ed-tech vendors aren’t directly impacted by tariffs, they should anticipate that their school district partners are likely to absorb higher costs because of trade restrictions.
“That may impact their ability to spend,” she said. “If things get more expensive, then cuts will have to be made elsewhere.”
Takeaways: For education companies, their biggest worries about about the next year come down to one thing: funding.
More than fears of inflation, tariffs, school closures, and other sources of disruption.
The survey results show that many providers of products and services are already taking steps to cope with the turmoil. Many are trying to reach out proactively to support school systems — an approach that won positive reviews, when done tactfully, during Covid.
Others are heading in different directions — moving aggressively to enter new state markets, and to direct K-12 clients to new sources of funding.
Time will tell if those strategies help organizations in the market, or if they will have to pivot and roll out another another set of solutions in the months ahead.