March 17, 2025  |  Peter Long

Shuttering the Department of Education: What Now?

Never miss a Moment: Sign up for MCH's Monday Marketing Moment here!

The U.S. Department of Education recently made a dramatic move, laying off more than 1,300 employees — almost half of its workforce. In an interview on FOX News, Education Secretary Linda McMahon was asked: “Is this the first step towards a total shutdown?” to which the Secretary answered “Yes!”

While the actual Department of Education can only be eliminated by Congress, the plan (according to Secretary McMahon) is to downsize the department as soon as any remaining DOE programs and funding have been redistributed to departments at the state level, or other federal agencies or departments. This development aligns with the administration’s long-standing goal of reducing the federal government’s role in education.

Key funding programs for 2024 remain intact, but the long-term future of federal funding for education is now clouded with uncertainty. With the exception of what can be found within the Project 2025 outline, there is little published about what is supposed to happen next for education. What funding programs will survive going forward? How will any critical programs function in new agencies? What does this mean for K-12 schools, higher education institutions, and the broader education publishing and EdTech industries?

Let's break down the implications as we know them today.

What We Know Right Now: The Immediate Impact

In times of uncertainty, maintaining strong connections with schools and districts is more critical than ever. Proactively engaging with education leaders and decision-makers will help organizations stay ahead of shifting priorities and funding changes. The layoffs at the Department of Education come as part of a larger effort to restructure and downsize the federal agency. However, despite this significant reduction in staffing, federal officials insist that core functions - such as student load disbursements and Title I funding - wil continue as planned for this fiscal year. Here's what we know so far:

Major funding programs remain intact for now

• Federal student loans, Title I funding (for low-income schools), and IDEA (special education grants) are still scheduled to be distributed.
• Schools and districts relying on these programs should expect business as usual for this school year.

Uncertainty for more specialized programs

• Title II (professional development funding) and many other federal grants along with other agency programs for schools - such as E-Rate (an FCC program) are in limbo. Some of these programs have already seen cuts.

Targeted elimination of DEI initiatives

• The administration has prioritized removing Diversity, Equity, and Inclusion (DEI) programs and funding, cutting off funding to higher education institutions, K-12 districts, and education-focused organizations that try to maintain any parts of DEI efforts. 

How Will This Affect Schools and Education Companies?

Schools and Districts Must Prepare for Potential Long-Term Budget Shifts

While in aggregate federal education funding only makes up about 10% of the total funding schools and districts receive (the rest coming from state and local taxes), this funding is disproportionately allocated to lower-income, urban, and rural districts.

• If federal funding programs like Title I and IDEA undergo significant changes in 2025-2026, these schools will likely experience the most adverse effects.
• Wealthier school districts and private schools may see minimal disruptions since their funding sources are more stable.

Private Schools Could Benefit from Funding Reallocations

There are ongoing discussions about expanding school choice initiatives, which could allow families to redirect public funds toward private or charter schools.

• This could mean a rise in demand for private school curricula, learning materials, and EdTech solutions.
• Education publishers and content providers should monitor these potential policy changes, as they could open up new opportunities within the private school sector.

Publishers and EdTech Companies Face Uncertain Grant Opportunities

With Title II and E-Rate funding in question, companies that provide professional development, instructional resources, and technology solutions should be proactive in exploring alternative funding sources.

• State and local education agencies may need to pick up the slack, shifting procurement priorities.  The burden of funding for the technology products and services needed to run a digital classroom, or an entire school, will now fall to local and state organizations.
• Companies should focus on building relationships at the state level, where funding decisions could play a larger role moving forward.

What’s Next? Keeping an Eye on 2025-2026​

While this school year’s funding is largely secure, next year’s budget process could bring major policy shifts. Here’s what to watch for:

• Legal challenges and congressional negotiations – Teachers’ unions, education advocacy groups, and lawmakers are already pushing back on these cuts. The final outcome is still evolving.
• State-driven education initiatives – As the federal government pulls back, state legislatures may step in to shape funding and policy in different ways.
• Expansion of private school funding – If more states allow federal or state education funds to be used for private education, expect a shift in market dynamics.

With major policy shifts on the horizon, ongoing communication with schools, districts, and state agencies will be essential. Companies that stay informed and responsive to educators' evolving needs will be better positioned to support them — and sustain long-term growth.

What Should Schools and Companies Do Now?

For Schools and Districts:

• Stay the course for the current school year. Most approved funds should still flow as expected.
• Start long-term budget planning, especially in districts that depend heavily on federal assistance.
• Advocate at the state level to ensure key funding priorities are maintained or expanded.

For Publishers and EdTech Companies

• Diversify funding sources – Relying solely on federal dollars may be risky in the coming years.
• Monitor grant opportunities at the state and local level, where funding gaps may lead to new procurement initiatives.
• Engage with the private school sector, which may see increased enrollment and demand for specialized educational content.

Conclusion: A Critical Moment for Education Funding

The recent mass layoffs at the Department of Education represent a significant shift in federal education policy. While major funding programs remain in place for now, uncertainty looms over future budgets and grant programs.

For schools, publishers, and EdTech providers, the key to navigating this uncertain environment will be staying informed, adapting to policy shifts, and proactively seeking new funding opportunities. As the education industry waits for clarity on 2025-2026 budgets, stability at the state and local levels will be essential in mitigating potential disruptions.

We’ll continue tracking these developments and providing updates as more information becomes available. Stay connected, stay prepared, and let’s work toward a more certain future in education funding.

More Insight from MCH

Use our free ListBuilder tool to explore our education data, or Contact Us to strategize as a team.

• Read over Part 1 and Part 2 of our series on Charting Your Course Through Uncertain Times.
• Check out our series on Selling to Schools and Districts here!
• Plan ahead with MCH's Top 25 Education Events in 2025 - Download here

About MCH

For nearly a century, MCH has empowered educational marketers with the data, tools, and solutions needed to thrive. Our cutting-edge technology continuously updates and verifies millions of educator records, ensuring you have the most accurate information for your campaigns.