Federal spending deal maintains funding for education, rejecting Trump’s proposed cuts

Federal funding for California schools and colleges would remain stable for the remainder of the fiscal year under a bipartisan spending deal, with Congress rejecting deep cuts originally proposed by the White House. 

The deal still needs to be approved by both chambers of Congress before 12:01 a.m. Saturday to avoid a partial shutdown of the federal government. With the House unlikely to return to Washington, D.C., until Monday, there could be at least a brief shutdown. California schools would be mostly unaffected by a shutdown since they have already been allocated most of their funding for this school year. There could, however, be minor disruptions to some programs. 

The agreement, which was endorsed on social media by President Donald Trump, would give flat or slightly increased funding for early education, low-income students, and financial aid. It also keeps funding intact for grants supporting Hispanic-Serving Institutions, potentially saving those programs despite the Trump administration’s declaration that they are unconstitutional. 

The funding package has been received as mostly good news by education advocates, who feared significant reductions. 

“In this very tight fiscal environment and where we started this process with the president’s budget, this is as good as it gets,” said David Griffith, who leads policy and advocacy for the National Association of Elementary School Principals.

The agreement would give $79 billion to the U.S. Department of Education, a $217 million increase compared to last year and $12 billion more than the White House initially requested. The future of the department remains uncertain, as Trump has sought to dismantle it. 

The deal includes $18.43 billion for Title I grants, which are available to schools with large numbers of low-income students, and $14.23 billion for Individuals with Disabilities Education Act grants. That amounts to a $20 million increase for both programs, which are considered the foundation of federal K-12 assistance. 

The package also includes about $12.4 billion for Head Start programs, which provide education, child care, and meals to low-income preschoolers. That’s about $85 million more than last year.

California has 137 Head Start programs, which each operate multiple centers. 

The funding for Head Start “doesn’t keep up with inflation,” said Melanee Cottrill, the executive director of Head Start California. That means some programs in the state “are having to make some difficult decisions on what to reduce.” Still, Cottrill added that Head Start is “grateful to Congress” for the small increase. 

Higher education

Similar to K-12, the spending deal keeps funding intact for most programs, which impact colleges and their students.

The agreement maintains the maximum Pell Grant award at $7,395 for the 2026-27 academic year, denying the White House’s proposal to cut the maximum award by $1,000. Pell Grants are the main federal financial aid award available to low- and middle-income students.

It also includes $1.2 billion for the Federal Work-Study program, the same as last year. 

“It does feel like not seeing cuts to these programs is a bit of a victory,” said Nalia Medina, assistant director for government relations for the National Association of Student Financial Aid Administrators.

The agreement also notably increases funding for grant programs supporting Minority-Serving Institutions, including Hispanic-Serving Institutions, or HSIs. That’s despite the Trump administration’s move last year to eliminate those grants. U.S. Education Secretary Linda McMahon previously said the grants “discriminate by restricting eligibility to institutions that meet government-mandated racial quotas.”

California has 167 HSIs, the most of any state in the country. Colleges can get the designation if Hispanic students make up at least 25% of enrollment. The designation allows colleges to apply for the grants, which have a competitive application process and are not guaranteed.

Even though funding for the grants is included in the spending deal, it will still be up to the Department of Education to hold grant competitions and appropriate funding to the colleges, said Emmanual Guillory, senior director of government relations at the American Council on Education. 

“Congress sent a very loud message. The legislative branch said very loud and clear that they support these Minority-Serving Institutions. And they did so intentionally by increasing funding, which is a bold move and a signal to the administration of their support,” Guillory added.

Shutdown impact

If Congress doesn’t approve the spending deal by midnight Friday, causing a shutdown of much of the federal government, it “would likely have minimal impact” on most school programs and services in California, said Liz Sanders, director of communications for the California Department of Education. That’s because schools receive most of their federal funding in the summer. 

Still, there could be some consequences across the state, including potential closures of a few Head Start programs, which are funded via five-year grants. That funding can begin on the first day of any month of the year, Cottrill said. If any programs are relying on grants that are supposed to begin on Feb. 1, they would need to temporarily close if they don’t have another funding source, such as reserves. 

Cottrill said she isn’t sure how many programs might need to close. About half of the Head Start programs in California are schools, while the other half are nonprofit organizations. 

“The school districts obviously might have other funding sources that are available to schools,” Cottrill said. “The nonprofits might have philanthropic dollars, but it varies greatly by the organization.”

The shutdown would also likely cause problems for school districts that rely on money through the federal Impact Aid Program, which reimburses districts that lose out on property tax revenue because their boundaries include federal land, such as Native American reservations.

The application for next year’s Impact Aid program closes on Monday. If the government is shut down that day, no staff will be available to answer any last-minute questions. That “could have implications for next year’s funding for some school districts,” said Anne O’Brien, communications director for the National Association of Federally Impacted Schools, which represents schools located on or near nontaxable federal property.

For California colleges, the impact of a shutdown is likely to be negligible, as long as it is not prolonged.

“At this time, we do not believe there will be any notable near-term fiscal impacts to the California Community Colleges,” said Chris Ferguson, executive vice chancellor of finance and strategic initiatives for the state’s system of 116 community colleges.