As the federal commitment to K-12 spending remains unclear, district and school leaders across the country are working to understand the potential impact on their budgets and devise backup plans for possible cuts or disruptions.
What those backup plans look like is likely to have a direct impact on the way districts pay for products and services.
New survey data from EdWeek Market Brief shows the breakdown of exactly how districts are paying for products now — and what sources of funding they may turn to in the future to plug any potential gaps.
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.
“We’re really just trying to make sure that everything that we’re focusing on right now is going to impact student achievement,” said Anna Hairston, assistant superintendent and director of federal programs at DeKalb County Schools in Alabama, a roughly 8,600-student district.
“We’re also trying to figure out, what can we do to [help] the most people at one time as possible?”
EdWeek Market Brief’s story is based on the results of two online surveys conducted by the EdWeek Research Center. The first, nationally representative survey was conducted in March and April of district and school leaders. The other was taken in March and April of 400 representatives of K-12 businesses.
The survey of education company officials asked them what the most common sources of funding are that districts and schools use to pay for their products. Nearly three-quarters of respondents said districts and schools regularly use general operating funds to pay for materials.
The second largest funding source for their products and services is federal Title I grants — which is also the funding source they say customers are most concerned about. Title I grants, directed toward low-income schools, totaled $18.4 billion in the 2023-24 fiscal year.
While the Trump administration has proposed keeping Title I funding flat into the next fiscal year, concerns remain about the administration’s threats to withhold federal funding from states that don’t align with the Trump administration’s policy positions. The administration’s efforts to pursue those threats have been largely blocked by court orders as the legal cases play out.
State grants are a similarly large source of funding for education companies’ offerings, with 67% of respondents saying their district/school customers use them to purchase their products.
For Hairston, state grants are the go-to dollars for purchases of core curriculum and instructional materials. Supplemental curriculum resources, like an elementary-level social studies program, are often paid for using Title I funding, she said.
A combination of state and federal funds supports their intervention materials.
About 37% of officials at K-12 companies said federal Title II funds — a roughly $2 billion program largely used to support professional development — are regularly used to buy their products, followed by 32% who said the same of federal Individuals with Disabilities Education Act, or IDEA funds, a $14 billion program used to support students with special education needs.
The Trump administration’s budget proposals include maintaining current funding levels for key programs like Title I and IDEA funds. It also proposes transferring other individual, limited supplemental grant funding that is now administered under IDEA to the core funding stream.
The president’s proposals include eliminating Title III and consolidating Title II into a larger spending program, although it’s likely the final budget bill will look different as details shift amid negotiations in Congress.
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Districts and schools across the country are reporting delays in receiving usually routine federal funding allocations and uncertainty over the future of funding programs.
One in four respondents said their products are often purchased using Title III funding, which is directed to supporting English language learners and totals $890 million.
Just 2% of respondents said Medicaid, a source of funding for districts serving eligible students with special needs, is used to purchase their products or services.
The Republican budget bill moving through Congress proposes major cuts to Medicaid payments to states.
Which Funding Sources Are Most Vulnerable?
The majority of business officials surveyed, 62%, said district and school clients are concerned about Title I’s vulnerability. Two-fifths said district general operating funds could be vulnerable — potentially because of the larger economic impact policy changes may have on a districts’ enrollment or local tax base.
A similar portion of respondents, 39%, said their customers believe the status of Title II money is uncertain, followed by 37% who said the same of IDEA funding.
Roughly a third said state grants, Title III, and Title IV, are threatened by cutbacks due to federal policy proposals.
Hairston’s expectation is that Title II and Title III are most at risk, based on the proposals put forth so far.
Her district relies heavily on Title III: About 21% of her student population is comprised of English learners, on Title II for PD.
Losing any of that support “is a huge concern for us,” she said.
Finding New Funding Sources
So how will districts and schools pay for these products if proposed cutbacks come into being?
EdWeek Market Brief‘s survey of district and school leaders found that district general funds will likely be the top source leaders look to in addressing budget gaps.
Forty-three percent of district and school leaders surveyed said they’d turn to general funds to pay for the products and services they need, followed by 34% who will likely dig into state funding.
When districts turn to general funds to pay for products, that typically means those products are competing for dollars against an array of other priorities — which administrators may see as equally important.
Less than a third, 29%, said they could look to reserve funds to pay for products or services. But more than a quarter of the district and school leaders surveyed, 28%, said they had no other funding sources available at all — their only option is to make cuts.
Hairston is hoping Title I funding will remain stable and can help with the majority of purchases Title II and III have covered in the past, if those programs get the axe.
The hope is that “those things could just shift to another fund source,” she said.
Before culling products and services, the DeKalb school system takes a number of other steps aimed at reduce costs, including pooling common purchases made by individual schools into a districtwide order and making adjustments to how they administer professional development.
In one effort to pare back expenses for PD, Hairston said the district held a recent technology training session at a central location and asked staff members to rotate through, instead of holding separate training sessions individually on each campus.
The vendor providing the training worked closely with the district to help DeKalb officials reduce the cost, she said, offering a daily rate that didn’t change based on the number of participants and making it easier for Hairston to work the cost of the training into the budget.
Previous vendors have asked the district to pay the same rate to provide PD at each school separately. That’s difficult because of the varying sizes of schools in the DeKalb system and the distance it takes to travel between them.
“That flexibility is huge,” she said. “That’s always a challenge for us, is just trying to make sure the vendors understand how those dynamics work.”
When vendors haven’t offered that PD flexibility, “we just can’t go with them,” she added.
Local fundraising is another, relatively popular alternate fundraising option. It was selected by 22% of district and school leaders who responded, followed by 20% who said they would turn to foundations or philanthropies.
The Community Foundation of Northeast Alabama has been a new source of strength for Hairston as well, she said, as the district recently started working with them to support the hiring of a social worker in the district.
“We tried to start reaching out, even prior to the talk of some of the more recent [funding] decreases,” she said. “We try to stay proactive in our district and make sure that we have community partners to help as well.”
Takeaway: If federal funding goes away, education companies should expect that many of their products and services will be forced into a competitive new arena: school district general funds.
That means vendors will need to be prepared to make their case that a product is producing academic ROI or other tangible results, for example, or that it benefits a broad swath of the student population.
State funds are another source that districts will turn to, if federal money is reduced. Vendors would be wise to begin familiarizing themselves with those funding streams, their requirements, and how much is available, for what purposes.