White House Freezes Federal Grants
Legal Challenges and Budget Moves
California has launched a lawsuit citing the Impoundment Control Act, becoming the first state to seek judicial review of the freeze on federal grant funds.
At least 27 state attorneys general are reportedly evaluating legal recourse to challenge the Trump administration’s unilateral decision on grant withholding.
Massachusetts is exploring the use of state reserves and possible emergency funding bills after seeing around $94 million in withheld grants.
Connecticut has begun reallocating local dollars to sustain after-school and support services amid uncertainty over incoming federal funding.
Federal officials have not provided details on when or if the paused grants will be restored. The Office of Management and Budget (OMB) said the hold is part of “an ongoing programmatic review of education funding. “Initial findings have shown that many of these grant programs have been grossly misused to subsidize a radical left-wing agenda.”
OMB and the Education Department haven’t said when the review will be complete, and they haven’t guaranteed the funds will flow once it is.
TEA Releases Annual Performance Report
As we previously reported, OSEP released Texas’s IDEA Part B determination on June 20, 2025, rating the state as "Meets Requirements," signifying compliance with IDEA mandates.
The FFY 2023 Part B SPP/APR Clarifications document was also released to explain or correct aspects of the APR data submission.
Things to Know:
- TEA’s continued “Meets Requirements” status comes after a prior “Needs Assistance” classification in 2021 and 2022, signaling progress in Texas’s special-education oversight and outcomes.
- Each APR includes information on parent involvement (Indicator 8), which recently saw a modest rise in statewide survey scores.
- The current funding landscape includes sweeping state reforms such as HB 2 and SB 568—shifting from settings-based to intensity-based special education funding—and additional state grants targeting dyslexia interventions.
TEA’s public posting of the APR and clarification documents, and the return to a “Meets Requirements” status for IDEA compliance, mark important milestones in the state’s accountability framework. Texas officials and districts now can access the detailed indicator data as they continue to implement recent funding reforms and support program improvements.
The Special Education Funding Horizon
In 2026-2027, the special education allotment will also include a $250 million bump and commissioner authority to ensure that districts can maintain maintenance of effort requirements. However, because we don’t know the details of the tiers and service groups, it is unclear how this $250 million would be distributed across all district and charter systems.
The only information we have about the new funding system is based on the preliminary structure from the funding pilot that TEA conducted last year. In the pilot, the tiers of intensity of services were calculated from a combination of information about the student across five domains: academic, behavior, communication, independent functioning, and personal care services. The service groups were based on multiple factors, including related services, provider information, and details about dyslexia services.