Democrats say Education Department is withholding $630 million in grant funds

Two Democratic senators accused the U.S. Department of Education of limiting new grant awards by making multiyear funding available upfront instead of distributing it through a larger number of grants over time. The approach has left about $630 million in appropriated funds unissued across roughly 35 grant programs, according to an Oct. 13 letter to Education Secretary Linda McMahon from Sens. Patty Murray of Washington and Tammy Baldwin of Wisconsin.

The lawmakers said the department could have awarded more than 1,000 grants this year under its traditional annual funding approach, supporting programs such as student literacy, mental health services, education research, and teacher recruitment and preparation. Their criticism puts the focus on how federal education funds are being distributed, as well as how many organizations and students may receive support.

How the funding changed

The senators pointed to the Innovative Approaches to Literacy program as an example. The department announced it would make up to 35 awards using $30 million provided under the fiscal year 2026 appropriations law. Instead, it made four new awards and reserved $13 million for future years for those grants, according to the letter.

Murray, vice chair of the Senate Appropriations Committee, and Baldwin, the ranking member of its Labor, Health and Human Services, Education, and Related Agencies subcommittee, argued that concentrating funds in fewer awards conflicts with congressional direction. They also said the approach advances an effort to eliminate the department and some education programs.

Ellen Keast, communications director for the department’s undersecretary, defended the strategy in an Oct. 14 email. She said the department is “returning education to the states” and funding “the highest-quality grantees” to help children learn to read and support parents in college.

What happens to the funds

The dispute comes as the department faces lawsuits over grant cancellations, including decisions connected to recipients’ diversity, equity and inclusion practices. The source article says judges have sometimes ruled cancellations unlawful and required the department to reverse course.

In August, the department proposed a rule that would broaden its authority to terminate grants, including “for convenience.” The proposal would allow it to terminate, discontinue or withhold discretionary funding after a retroactive review of applications and their alignment with changing administration policies. The rule’s status has not been announced in the material provided.

Murray and Baldwin warned that if the proposed changes take effect, the department could terminate funds held for future years, potentially cutting a substantial portion of fiscal 2026 funding approved by Congress. The department did not address that specific warning in Keast’s response.

This report draws on information from K-12 Dive.