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More K-12 Funding News! | Top 10 Articles | GSV’s Big “Bett” | What does AI really look like on campus? | DOJ Issues New DEI Guidance

Author

Ben Wallerstein
August 01, 2025

This week, W/A co-founder and Chief Advocacy Officer, Anna Edwards, is filling in for Ben with a recap of her latest “standing room only” webinar on K-12 funding, policy, and politics.

Yesterday, I had the chance to join my colleague Marguerite Roza for a fast-moving conversation on the volatility shaping K–12 funding and policy and what it means for the sector heading into fall.

From the temporary freeze and release of $6.8B in Title funds, to uncertainty around FY26 budget proposals, and the reemergence of federal flexibility and waivers under ESEA, the landscape is more fluid than it's been in more than a decade.

District and state leaders are working to adapt to not just new program rules and funding mechanisms but to a deeper shift in who’s setting the terms. As Marguerite put it, ‘the real shift is in who’s driving the conversation.’ And the conversation is going to be driven by states.

We started with the big news: At the top of the webinar, I broke the news that Penny Schwinn had formally withdrawn her nomination to serve as Deputy Secretary of Education. The Department confirmed the news shortly after. 

But that doesn’t mean Penny will not have a big role in federal policy. As Chief Strategist and Senior Adviser to Secretary Linda McMahon, she’ll have a role that keeps her squarely at the center of the Department’s realignment and positions her to influence policy strategy during a pivotal moment for the agency.

For those of us who’ve worked with her in Delaware, Texas, and Tennessee, this is welcome news. Penny brings a pragmatic, state-informed perspective that is often missing from federal policy conversations. She is as compassionate and mission-driven as she is strategic.

What We Covered: The session itself, titled Navigating Uncertainty: The State-of-Play for EdTech Funding and Policy, was designed to make sense of a moment when headline shifts (like rescinded ESSER extensions and impounded federal funds) are colliding with structural challenges: declining enrollment, rising labor costs, and state budgets stretched thin.

Here’s a rundown of the major topics that Marguerite and I unpacked:

  • The End of ESSER Isn’t the Only Story: While pandemic relief dollars are winding down, districts aren’t just faced with less money; they’re confronting more volatility. Temporary funding freezes, clawback rumors and new Title policy battles are making even short-term planning difficult.

  • Costs Are Up and Students Are Down: Staffing levels are at an all-time high, but student enrollment continues to decline. This dynamic is forcing hard choices, especially in districts where new roles created with ESSER funds became embedded in core operations.

  • Federal Share is Small but Disruptive: Only about 8% of district funding comes from federal sources, but even temporary disruptions can cascade across budgets—especially in districts with high concentrations of Title funding or those reliant on federal programs for staffing, technology, or wraparound supports. 

  • Flexibility and Waivers Are Back: The Department’s July 29 guidance is reopening the door for states to pursue innovation under ESEA—including waivers to support microschools, hybrid programs, or alternative assessments. This has massive implications for solution providers and advocates alike who’ve been waiting for the green light to test new models. Newfound flexibility (or, at least, the absence of a more prescriptive federal role) paired with level funding could mean increased resources allocated to pressing. state and local priorities

The constant? Uncertainty. But Marguerite and I agreed: The opportunity is in the adjustment. The funding landscape may be more constrained in the short term, but the appetite for innovation—particularly at the state level—is growing. Smart providers, advocates, and system leaders will be the ones who stay nimble and meet the moment.

ICYMI: You can catch the whole conversation here and find our slides here. We covered policy shifts, emerging state dynamics, and what providers should be doing now to stay responsive, relevant, and ready.

In this week’s edition, we round up the “Top 10 Articles of the Week” and take a closer look at:

  • Senate Rejects Deep K-12 Education Cuts and Trump Block Grant Proposal

  • World’s Largest EdTech Events Join Forces

  • Justice Department issues guidance on DEI programming

Top 10 Articles of the Week

  1. I’m a former governor, an education leader, and mother to recent college grads. Gen Z alarms me with their financial illiteracy [Fortune] 

  2. Gov. Jared Polis, NGA release education and workforce recommendations [Chalkbeat]

  3. AI Is Wrecking an Already Fragile Job Market for College Graduates [The Wall Street Journal]

  4. ‘Pairing Schools’: One Strategy, Two Very Different Outcomes [Education Week]

  5. Education Department tells states to seek waivers from ESEA [K-12 Dive]

  6. Lower Birth Rates Could Cause Enrollment Issues for Schools [EdSurge]

  7. Trump Admin. Releases Funding for Adult and Migrant Ed [Inside Higher Ed] 

  8. Trump administration will return more than $5B in public school funding it withheld [USA Today] 

  9. Advancing Economic Mobility Through Holistic Support [EvoLLLution] 

  10. Why Pre-K Is Good for a Parent’s Career [The Wall Street Journal]

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World’s Largest EdTech Events Join Forces

This week, Hyve, which organizes the Bett global event series, announced a merger with the GSV Summit, host of the annual marquee event for EdTech investors. The combined entity will now host events on 4 continents (North America, South America, Europe, and Asia) and reach over 100,000 participants each year.

Why it matters: EdTech is global. While North America continues to be the locus of venture and private equity funding for EdTech companies, there has been significant growth in company formation and investor interest in Europe, India, and Latin America over the past 5 years. In fact, the largest private equity transaction in EdTech history was in London-based Nord Anglia Education. 

The combination of Bett and GSV is a sign that there is even more room for growth in both the US and International EdTech markets. Entrepreneurs from every region of the world will now have access to GSV’s unparalleled network of investors, who, in turn, will now have more opportunities to assess the EdTech market each year.

What’s next? GSV and Bett will maintain their conference programming calendar for 2026, which includes The Show @ ASU-GSV, the ASU-GSV Summit, Bett Asia, Bett UK, and Bett Brazil. Keep an eye out for these gatherings in the Events section of this newsletter and let us know if you’ll be there!

Artificial intelligence is rapidly reshaping how students learn, create, and collaborate on campus and at home. But beyond the headlines, what does AI use really look like on today’s campuses?

Join Asim Ali Ph.D, Executive Director of the Biggio Center for the Enhancement of Teaching and Learning at Auburn University, California State University Monterrey Bay CIO Tara Hughes, Adobe Senior Product Marketing Manager Dhruva Chandrasekhar, and Senior Writer for the Chronicle of Higher Education Rick Seltzer for a dynamic conversation on how universities are moving from hype to hands-on innovation. Our panel will explore specific and creative ways institutions are encouraging students to use AI responsibly and effectively—whether through course design, new creative tools, partnerships with tech companies, or campus-wide initiatives.

The goal of this webinar is for attendees to walk away with fresh examples, practical takeaways, and a better understanding of how forward-thinking colleges are turning AI from theory into action.

Senate Rejects Deep K-12 Education Cuts and Trump Block Grant Proposal in FY26 LHHS Markup

In this week’s webinar, Anna and Marguerite reminded listeners of the old adage: “The President proposes and Congress disposes.” Yesterday, the United States Senate made them look prescient.

The Senate Appropriations Committee advanced its FY 2026 Labor, Health and Human Services, Education, and Related Agencies (LHHS) funding bill, rejecting many of the steep education cuts proposed in the President’s budget request. 

The markup suggests that the Senate version of the LHHS bill is not likely adopt the K‑12 Simplified Funding Program block grant. The bill also preserves funding for the Institute of Education Sciences (IES) and the Office for Civil Rights (OCR)—both slated for elimination under the President's FY 2026 proposal. It does not include cuts to max Pell.

The bill further includes prohibitions to prevent future funding delays or transfers, as has made headlines over the course of this past month:

  • Explicitly instructs ED to make formula funds available beginning on July 1, 2026

  • Prohibits ED from transferring Title I, Part A or IDEA to another federal department or agency.

Here’s a breakdown of what we know so far—and how the Senate’s position compares to both FY25 funding levels and budget proposals.

Key Takeaways:

  • Increases to Title I-A, Maintaining IDEA: The Senate markup does not adopt the administration’s proposed reductions to Title I (supporting low-income schools) or consolidation of certain IDEA programs (special education).

  • ESEA Programs Maintained: The Senate did not include the simplified formula block grant and instead continued level funding for all ESEA programs by Title.

  • Preschool Development Grants Preserved: Despite the President’s proposal to eliminate them, bipartisan support maintains the funding. The bill also provides increases for other early childhood federal programs, including:

    • $8.8 billion for the Child Care and Development Block Grant (CCDBG), an $85 million increase over fiscal year 2025.

    • $12.3 billion for Head Start, an $85 million increase over fiscal year 2025.

  • Maximum Pell: The Senate included a maximum Pell Grant award of $7,395, rejecting the President’s $1,000 proposed cut. 

  • Job Corps remains funded: The Senate rejected the President’s proposed elimination of Job Corps funding, citing workforce needs, and included sustained funding for TRIO and GEAR UP.

  • Support for career and technical education (CTE): While details remain limited, committee members emphasized the importance of expanding pathways to postsecondary success.

  • Bipartisan pushback: Senate leaders, including Subcommittee Chair Sen. Shelley Moore Capito (R-WV) and Ranking Member Sen. Tammy Baldwin (D-WI), framed the markup as a bipartisan defense of foundational education programs—especially in the face of proposed cuts that would disproportionately impact vulnerable students.

Stay tuned: We’ll provide a deeper dive into the education funding tables as soon as they are released.

Justice Department Issues Guidance on DEI Programming

On July 29, the U.S. Department of Justice (DOJ) issued a nine-page guidance memo outlining whether, how, and why certain practices may violate federal civil rights laws. The memo applies to all recipients of federal funds, including colleges, universities, and K-12 systems, and warns that noncompliance could result in a loss of federal grant funding.

The DOJ memo follows similar guidance from the Department of Education earlier this year, which was temporarily blocked in federal court. It signals continued federal focus on how civil rights laws are interpreted and enforced in educational settings.

Key highlights:

  • Unsurprisingly, DOJ focuses its attention on programs or policies that explicitly consider race (scholarships, mentorships, and leadership opportunities) without satisfying Constitutional requirements.

  • The DOJ also cautioned that even “facially neutral” policies may raise legal concerns if they appear to function as proxies for race or gender. Examples include:

    • Admissions or hiring preferences based on “lived experience,” “cultural competence,” or having “overcome obstacles.”

    • Recruiting from specific geographic regions associated with particular demographic groups.

  • Institutions are advised against using diversity statements in hiring or admissions if they advantage candidates based on protected characteristics.

Single-sex spaces and athletics: The memo reiterates that federally funded institutions must maintain sex-separated spaces, such as bathrooms, locker rooms, and athletic teams, in accordance with biological sex, noting that noncompliance could create legal exposure under Title IX and Title VII. [Higher Ed Dive] 

The bottom line: While the DOJ memo is framed as guidance—not a binding rule—it reflects a likely shift in federal scrutiny of programs and practices that skirt constitutional lines. Institutions are likely to reevaluate existing policies to assess legal risk and compliance.

  • Dr. Candice Castillo was selected as the new Deputy Director of Academics for the Oregon Department of Education. Castillo is currently the Deputy Secretary of Student Support Services at the New Mexico Public Education Department. 

  • New Jersey Democratic gubernatorial candidate Mikie Sherrill tappedDale Caldwell, president of Centenary University, to be her lieutenant governor. Caldwell also served on the New Brunswick Board of Education for 26 years.
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