Federal Budget, Federal Vouchers, and US Dept Funding Freezes — What’s the Impact on K-12 Schools?
Public schools around the country have been thrown into uncertainty and chaos as threats of federal funding cuts have become a reality. The congressional budget passed last week makes massive cuts to Medicaid and SNAP, which will limit services to students in public schools, and creates a first-of-its-kind federal voucher bill that will siphon tens of billions from public schools. Now, the US Department of Education has frozen $6.2 billion in program funding for schools across the country, just as Arizona schools are getting ready to start classes.
Federal Budget & Impacts on Public Schools
This week, Congress passed President Trump’s budget, which imposes sweeping cuts to public services that will have dramatic negative impacts on Arizona families, students, and public schools — all in service of tax cuts for the ultra-rich.
Cuts to Medicaid will significantly harm public schools by reducing funding for crucial health and support services, potentially leading to staff reductions, increased costs, and decreased academic outcomes for students. In Arizona, Medicaid cuts will likely impact the availability of school nurses, mental health professionals, and resources for students with disabilities, affecting the overall quality of education and student well-being. Medicaid provides $7.5 billion per year to deliver access to the physical and mental health services nearly 30 million students in public schools need to excel academically.
Cuts to SNAP will negatively impact public schools by reducing access to free and reduced-price meals, potentially increasing food insecurity among students, and disrupting school meal programs. SNAP provides crucial support for low-income families, and cuts can lead to a decrease in students eligible for automatic enrollment in free school meals, requiring more applications and potentially increasing school meal costs
Federal Private School Voucher Program
The approved budget includes a sweeping new version of the fiscally irresponsible and broad federal voucher program designed to support private and religious K-12 schools. The approved program removes the cap included in the previous House version — raising the potential cost by tens of billions each year. ITEP (Institution on Taxation and Economic Policy) has published a new analysis estimating that the cost of the newly passed federal voucher program could be over $50 billion per year — more than the combined annual cost of IDEA ($13 billion) and Title I ($18 billion).
The voucher program creates an unprecedented, dollar-for-dollar federal tax credit. The credit would fully reimburse any and all donors for the first $1,700 they give to groups that hand out tuition vouchers to attend private schools (called STOs in Arizona). As the ITEP report states, “There is no other cause—not children’s hospitals, veterans’ groups, or disaster relief—that taxpayers can contribute to and see the entire cost of their contribution bankrolled by the federal government.”
According to ITEP, “Ultimately, the true cost of the program will be determined in large part by how effective the private schools and their proponents are in encouraging voucher supporters to contribute. It is likely that the [Besty] DeVos family, for instance, will invest considerable resources into raising awareness of this tax credit. It is also possible that a cottage industry focused on securing additional donations in return for a finder’s fee could crop up.”
U.S. Department of Education’s Funding Freezes
School districts in Arizona and nationwide have been thrown into chaos and uncertainty this week after President Trump’s U.S. Department of Education refused to allocate billions of dollars for programs supporting underserved children. The agency was due to release $6.2 billion on July 1, 2025 across five federal programs, including funds intended to help states support migrant students and English-language learners. With many Arizona schools starting classes in the next few weeks, this unprecedented move is making planning difficult — if not impossible — for school leaders across our state.
A notice sent to congressional staff on June 30 warned lawmakers that states wouldn’t receive their Congressionally-approved funding on the set date of July 1. The money, the notice said, is “under review” due to the recent change in presidential administrations, and “decisions have not yet been made concerning submissions and awards for this upcoming academic year… The Department remains committed to ensuring taxpayer resources are spent in accordance with the President’s priorities and the Department’s statutory responsibilities.”
Attempts like these to unlawfully freeze funding are part of the Trump administration’s agenda to dismantle public education — and were all prescribed in Project 2025.
According to the Learning Policy Institute, the money on hold represents more than a tenth of federal education funding for all states — including $118,264,933 for Arizona public schools. A cut of that magnitude would have significant and disproportionate impacts on Arizona’s public schools, which serve many low-income students, migrant students, and students learning English. These funds support critically needed before- and after-school programs, hiring teachers, and ensuring quality learning supports for all students.
Here’s a breakdown of the withheld K-12 funding across the five targeted programs:
- Educator professional development: $2.2 billion
- Before- and after-school programs: $1.4 billion
- Academic enrichment: $1.3 billion
- English-learner services: $890 million
- Migrant education: $375 million
On Wednesday, Trump’s Office of Management and Budget falsely claimed, “Many of these grant programs have been grossly misused to subsidize a radical leftwing agenda.”
The Real Plan? Privatization of Public Education
Public education is the bedrock of our communities and the cornerstone of our democracy. Trump and the billionaires pushing to privatize our public schools know this. We’ve seen this playbook before: block grants voucherize funding, allowing politicians to slash public education funding while diverting federal funds to private schools with no accountability. Federal vouchers will defund public education and leave students and educators in struggling schools even worse off, depriving students — especially those in underfunded rural and low-income communities — of the support they need to succeed. Put simply, it’s a grift that’s bad for states and bad for our democracy.