The Delta Issue #46

What states should do now: a recap of our ESEA funding freeze webinar

Thank you to everyone who joined yesterday’s conversation with Catherine Pozniak about the ESEA funding freeze and how states can respond. If you couldn’t make it, here’s a quick recap, plus three resources you can use right now to take action:

RECORDING: Watch the full webinar discussion

SLIDES: Download the presentation PDF

GUIDE: Read our quick-start guide for states

Hi everyone, Kunjan here.

More than $6 billion across five major ESEA grant programs are in limbo just weeks before school starts.

If you need more context on the federal funding freeze, read our earlier Delta here.

Yesterday, nearly 200 state leaders, advocates, and partners came together to face this uncertainty head-on and figure out what to do next.

Here’s our answer: Act now. Don’t wait for USED. States should help districts build a 3-month plan to keep the highest priorities moving for kids. That means helping them identify available funds, stretch what they have, and make sure the right supports stay in place until USED releases the dollars they promised.

Identify Available Funds.

It will be nearly impossible for any state or district to plug the entire gap created by this freeze in funds. However, in this moment of uncertainty, states and districts need to find a way to preserve the highest leverage activities for students. One way to do that is to understand which federal dollars are still on the table, but they’re not obvious or easy for districts to find on their own.

Yesterday, we talked about rollover funds, older dollars from previous grant years that some districts may still have in their budgets because COVID and ESSER shifted normal spending patterns.

To best explain how this works, here’s a chart breaking down the federal funds timeline:

The overlap between the Federal Fiscal Year (FFY), typical school year, and most state fiscal years means that FFY 2023 and FFY 2024 funds might be available during the 2025-2026 school year.

Here’s how to read the chart:

🟢 Green money: This year’s new funds (FY25). Right now, these are frozen for the 5 months in question.

🔵 Blue money: Last year’s funds (FY24). Some districts still have leftover dollars.

🟠 Orange money: Older funds (FY23). Some districts may still have leftover dollars from two years ago.

Without help from SEAs, most districts don’t know how much “blue” or “orange” rollover funding they may still have available. Right now, those funds likely live in a spreadsheet on someone’s computer in the state office.

States can support districts immediately by sharing their rollover amounts with them, not just for these 5 specific grants, but for all grants.

Three steps states should take now:

Communicate:

Make sure every district knows what’s happening and what’s not. Clarify what’s known, what’s unknown, and why districts need a 3-month plan now.

Set up clear points of contact, keep FAQs updated, and use consistent channels for sharing guidance and fielding district questions. Good examples are already out there: Arkansas, Iowa, and Colorado have stepped up early to keep superintendents in the loop.

Assess & Mitigate:

States should help districts find every dollar they already have across all funds from the “orange” and “blue” money. Pull balance sheets, share them, and match leftover funds to the highest-need spending first.

LEAs should compare planned expenditures to these available funds. Help prioritize what matters most, and use the rollover funds to preserve those expenditures. Remember to document plans and expenses in case funds become available retroactively.

Maximize Flexibility:

Some states have Ed-Flex or other tools they can use to give districts more room to maneuver. Use them now.

Help districts transfer dollars, redirect state set-asides, and clear the path for quick budget changes. States should also review discretionary and state activity funds: are there dollars that can be temporarily reallocated to keep the highest-impact work going?

And make amending district federal programs applications and drawing down funds easy, schools don’t have time for extra paperwork right now.