July 3, 2025  |  Peter Long

K12 Funding Today: The Good, The Bad, The Ugly

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In 1966 Clint Eastwood stared in a Western film called “The Good, The Bad, and The Ugly”! Recent cuts being made in educational funding have made me feel like we are back in the wild west days depicted in that film. I will spare everyone from a long explanation of the plot of that old movie – but suffice it to say the search for money and the fight to survive play a prominent role in the film. The K-12 educational funding space is undergoing radical transformation in an almost wild west way of Presidential orders, local budget cuts, random DOGE downsizing decisions, tariffs, school choice funds and more.   And more funding cuts and changes are on the way. 
What does it mean? How do we adjust? Who is winning and who is losing?  Let’s take a quick look:

The Good

It can feel a bit funny to celebrate things that have always existed as a “Good” win.  But recently a lot of funding areas have been under siege and a few critical court case decisions hung in the balance between the future of a number of funding channels.

• The Supreme Court recently upheld the funding methods for the E-Rate program which schools and districts use to gain affordable internet services. This was a big win for schools and districts which would have faced massive new bills for broadband services if the program was ruled unconstitutional.
• School Choice advocates have won a huge victory with initiatives from the Trump Administration and the courts. Private schools, religious schools and charter schools will certainly see a huge boost in funding and in the longer-term new schools being created.  Where this money is taken from – who loses – varies by state. This will be a complex situation with likely 50 different state methods – and maybe even different district level processes.  So, whether Robin Hood steals from the rich and gives to the poor – or – steals from the poor and gives to the rich – will certainly vary by state.  But there is no doubt that Private, Religious, and Charter Schools will be winners in many states..
• Recent legalization of gambling and the growing taxation support these new gambling tax dollars bring may help fill deficits caused by Federal cut actions in many states. While this may not solve any funding issues for states, it may soften the impact of future cuts.

MCH has built out a State-level funding chart you can download here that will help marketers understand where funding will be the strongest and where it will be the weakest.

The Bad

Sadly, there is more bad funding news than we can properly cover here. There is no single funding issue that is going to devastate the system. Instead, what we see is the confluence of many little streams of cuts all dumping together to form the river of combined cuts that is raging towards K-12 schools. These include things like:

• The impact of Tariff and increased costs for educational products.
• Potential cuts to the SNAP and food assistance programs at schools if the Big Beautiful Bill becomes law.
• The $600 million in cuts that eliminates all funds related to teacher training (Title 2 funds)
• Cuts to over $600 million in Federal K-12 Grants for numerous programs such as:
  • https://www.ed.gov/about/news/press-release/us-department-of-education-cancels-additional-350-million-woke-spending
  • https://www.ed.gov/about/news/press-release/us-department-of-education-cancels-divisive-and-wasteful-grants-under-comprehensive-centers-program
• Reallocation of Title One funds for School Choice grants
• Some new State initiatives may provide newly allocated School Choice grants out of existing State education funds, leaving less funding for public schools.

The Ugly

The current Trump administration has been very clear about its determination that education should be controlled by the individual States and local districts and not the Federal Government. While State and local governments already control educational curriculum standards, school schedules, etc., there seems to be a strong push from the Trump administration that America needs to completely remove the Federal Government from the educational landscape.  Closing the Department of Education and freeing up many government spending priorities and eliminating grants and other programs.  But the rhetoric from the administration (about local control being best) does not seem to be followed up by letting local control call the shots when you consider recent moves by the Trump administration that clearly show their desire to influence and even control very detail areas of local school budgets – curriculum teachings – student life and more.  
Whether you agree with the administration’s actions or not, the “federal” approach being used is currently pretty heavy-handed.  We are seeing complete funding hold backs and legal actions being used to force Federal policy wishes at state and local districts.  This looks a lot more like Federal wishes being forced on schools than letting state and local wishes – ideas – being respected.  
Consider this: On July 1, the Trump administration held up over $7 billion in K–12 summer and after-school program funding — right as summer programs were already in session. This sudden decision left states scrambling. Additionally, states like Maine and others have been threatened with complete loss of all federal funds if they don’t comply with evolving federal demands.
This comply or else process has become a nightmare to navigate. It's a stop-and-go scenario — reminiscent of tariff battles — that creates a chaotic environment for schools trying to make multi-year plans. Districts design programs and hire staff based on known funding streams. When those are suddenly withheld or rerouted, it throws teachers, administrators, parents, and students into turmoil.

Final Thoughts: Follow the Funding

In the classic Clint Eastwood film The Good, the Bad and the Ugly, the treasure is buried in a cemetery, and everyone’s racing to find it. Sadly, that’s what the K–12 funding landscape feels like right now. The key to success in the next few years will be understanding where the money is going (buried) — and just as importantly, where it's not.
Some states and communities will rise to the opportunity, investing in their public schools. Others may redirect funds toward private, charter, or religious schools (making new winners there), while some will simply keep things the way they are. The smart marketer has to figure all this out as it unfolds in real time.
At MCH Strategic Data, we’re tracking these shifts closely to help education marketers know where to focus, how to pivot, and how to thrive amid the change. As the K–12 funding environment evolves, we’re committed to providing the insight and tools you need to succeed — and to helping you chart a course through this increasingly complex territory.
We’ll be here to help you follow the funding and find your path forward.

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