After more than a year of uncertainty surrounding federal education funding, Congress has finalized the fiscal 2026 budget, and for public schools, the outcome brings sustained funding rather than sweeping cuts. 

In a narrow 217–214 vote on Feb. 3, the U.S. House approved a package of five federal spending bills already passed by the Senate, including funding for the U.S. Departments of Education and Health and Human Services. President Donald Trump signed the legislation into law shortly afterward, ending a brief four-day federal shutdown tied to a separate dispute over Homeland Security funding. 

For educators and school systems, the most notable takeaway is that lawmakers rejected the administration’s proposal to cut dozens of federal education programs and distribute remaining funds through block grants, which offer states significantly more flexibility in spending with far less federal oversight. Instead, the final budget maintains level funding for virtually every major K–12 investment and continues to deliver that funding to local education agencies (e.g., school districts) based on campus and student level data, rather than aggregating funding for each state into one state-level grant. This includes core formula grants such as Title I for students from low-income households, IDEA for special education services, Title II for educator professional development, and Title III for English learners. 

Because most federal education dollars are forward-funded, these allocations will begin flowing to states this summer and will support district budgets for the 2026-27 school year. 

For Texas districts, level federal funding provides short-term budget predictability at a time when many school systems are already navigating state funding constraints, inflationary cost pressures, enrollment drops, and staffing shortages. 

In addition to maintaining funding for many programs the administration had proposed zeroing out, Congress approved a symbolic $20 million increase to both Title I and IDEA funding. These programs represent by far the two largest pots of federal education funding outside of the school lunch program, which is funded separately.  

Title I remains a critical funding stream for Texas, which serves one of the nation’s largest populations of economically disadvantaged students. Flat funding means districts will not see relief from rising intervention, tutoring, and wraparound service costs. 

IDEA funding stability is particularly significant given Texas’ ongoing corrective action requirements related to special education identification, services, and staffing capacity. Maintaining federal flow-through dollars helps districts sustain evaluation services, specialized staff, and compliance supports. 

The continuance of Title II funding at current levels preserves federal support for teacher recruitment, mentoring, and professional development, which is especially important as Texas districts work to address educator shortages and retention challenges. 

Title III funding remains vital for bilingual and ESL programs as Texas continues to enroll a rapidly growing population of emergent bilingual students. 

While stable, flat funding also means federal dollars will not keep pace with rising service costs in many Texas districts, which places continued pressure on state lawmakers to address school finance and educator workforce investments at the state level. 

Although not an outright block of the Trump administration’s ongoing efforts to shift certain federal education programs to other agencies or further scale back the role of the U.S. Department of Education, the legislation does require the executive branch to consult more closely with Congress as those changes are considered, and it makes clear the agency does not have unilateral authority to move cabinet-level functions from one agency to another. The bill also provides nearly $400 million for department staff compensation, an amount slightly below the prior year’s but notable given recent workforce reductions. 

Lawmakers additionally restored funding for smaller agencies the administration had attempted to eliminate, including AmeriCorps and the Institute of Museum and Library Services, both of which support programs accessed by Texas schools and community partners. 

Congress’ final fiscal 2026 agreement preserves existing federal education funding streams and avoids the deep cuts proposed earlier in the budget process. For Texas schools, that means short-term stability in key federal supports but no new fiscal capacity to address growing student needs, staffing challenges, or service mandates. 

While this provides at least a bit of relief for district leaders in Texas, with planning already underway for the 2026-27 school year, they will now turn their attention to how flat federal funding and lower enrollment in many districts intersects with the Texas school finance system and how it all affects educator retention (or possible reductions in force), educator pay, and special education capacity.