It is expected that the FY26 education funding bill will be completed and passed by the Jan. 30 deadline when the current temporary government funding expires.

The funding plan passed by the Senate Appropriations Committee maintains current funding levels or provides a nominal increase for most programs and is much more favorable to schools than the House committee-passed bill, which eliminates many programs.

One of the issues still to be decided is whether the bill will include a provision to prevent federal K-12 programs from being moved out of the Department of Education via Interagency Agreements.

Interagency Agreements concerns U.S. Education Secretary Linda McMahon entered into a series of Interagency Agreements that would shift most federal K-12 programs and activities over to the Department of Labor (with other programs being sent to other cabinet agencies).

There are a litany of risks that may result from this shift, including:

By law, the Office of Elementary and Secondary Education cannot be moved out of the Department of Education or eliminated. The attempt to move all of the program activities overseen by OESE is a workaround to this impediment.

Special education is not included in the Interagency Agreements although it is expected it will be moved to the Department of Health and Human Services at some point. IDEA is first and foremost an education law, not a disability law.

Interagency Agreements have been signed, dated Sept. 30, 2025, but no transition steps have been taken to date. Any impact would first be seen at the state level and eventually reach districts and schools.

NAESP recently sent out an Action Alert asking members to contact their elected officials to keep education programs in the Education Department during this critical time when the final decisions over the FY26 funding bill are being made. It is critical for school leaders to express their opinions and concerns with congressional representatives.

ESSA waivers and block grants Returning education decision-making and flexibility to the state is a priority for Secretary McMahon. She has invited states to apply for flexibility under existing waiver provisions. Iowa applied for and was just approved for an ESSA wavier, which consolidates federal K-12 funds that can be used at the state level for state activities. This decision grants Iowa “Ed-Flex” authority, meaning the state can waive certain federal requirements at the local level if districts request it.

Many states are closely watching these waivers, with an interest in consolidating funding, increasing flexibility and waiving local requirements at district request.