What Happened?

Federal funding for public K-12 schools has fallen back to pre-pandemic levels, and in inflation-adjusted terms, the main federal education law has lost nearly a quarter of its buying power since 2002, according to a report on public school funding published by Congress' research branch.

The report found that the federal share of public school revenue dropped to 11.68 percent in fiscal 2024, down from a pandemic-era high of 13.73 percent in fiscal 2022. That earlier spike came from roughly $200 billion Congress sent to schools through emergency relief programs during COVID-19.

Why Does it Matter to Me?

States cover about 46 percent of public school costs, and local governments cover about 43 percent.

But that smaller share is targeted. The Elementary and Secondary Education Act (ESEA), the main federal K-12 law, directs money toward specific groups, including students from low-income families through a program called Title I. When that funding shrinks in real terms, schools serving the most economically vulnerable students feel it most.

Adjusted for inflation in 2025 dollars, ESEA funding fell from $39.1 billion in fiscal 2002 to $29.7 billion in fiscal 2024. That is a drop of nearly $10 billion in purchasing power over roughly two decades.

Both Sides, Now

Supporters of restraining federal education spending argue that states and local governments, which together fund nearly 90 percent of public schools, are better positioned to make decisions about their own classrooms. The CRS report notes that overall public school revenue has grown substantially over time, driven by state and local increases.

Critics counter that federal dollars are not interchangeable with state and local money. ESEA funds flow specifically to high-poverty schools and targeted student populations. A cut in federal funding does not automatically get replaced by a state or local dollar, particularly in lower-income districts that rely on the federal contribution most.

Congress last updated ESEA through the Every Student Succeeds Act in 2015. The law's funding authorizations expired after fiscal 2021, though Congress can still fund the programs through its annual spending process.

What Happens Next?

Congress faces a decision on whether to reauthorize ESEA, which has not been comprehensively updated in more than a decade. Reauthorization would set new funding targets and program rules. Without it, programs continue under the annual appropriations process, but with no updated policy direction.

Any cuts to ESEA programs would fall hardest on Title I schools serving large numbers of students from low-income families, the CRS report found. There is no reauthorization vote currently scheduled.

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