A Summary of the U.S. Department of Education's FY 2027 Budget Request

The White House on April 3, 2026, released President Donald Trump's fiscal year (FY) 2027 budget proposal for the next federal fiscal year that begins on October 1, 2026. The president's budget proposal serves as a fiscal blueprint for the administration's policy priorities and signals to the U.S. Congress what the White House hopes to accomplish over the coming years. It also provides a detailed look at how the president's spending and revenue proposals would affect federal deficits and debt. It includes the administration's assumptions about how those policies would affect economic growth, inflation and interest rates.

For FY 2027, President Trump is asking Congress to enact a $2.2 trillion budget for discretionary programs. The proposal calls for a major increase in defense spending, along with cuts for domestic programs. It requests $660 billion for all nondefense agencies – a 10 percent funding cut versus FY 2026 enacted levels. Ultimately, Congress has the power of the purse and is free to accept all, some or none of a president's budget request.

Office of Management and Budget Director Russell Vought will testify before the U.S. House of Representatives Committee on the Budget on April 15 in support of the request. Individual cabinet secretaries will also testify in the coming weeks. Afterward, the congressional appropriations committees will begin to mark up the 12 individual FY 2027 appropriations bills with the goal of enacting the legislation prior to September 30, 2027.

Specifically, the budget requests $76.5 billion in discretionary budget authority for the U.S. Department of Education (ED or Department) for 2027, a $2.3 billion or 2.9 percent decrease from the 2026 enacted level. According to the administration, the budget "consolidates and eliminates dozens of programs" and refocuses federal education policy on "improving academic achievement instead of promoting the divisive ideologies of Washington bureaucrats." The administration states that the budget advances efforts already underway to "dismantle the Federal education bureaucracy," including "reducing ED's staff" and "transferring programs to other agencies that can deliver better results."

This Holland & Knight alert looks at the ED's FY 2027 justifications of appropriation estimates to Congress.

Volume I

Elementary and Secondary Education

• Title I Grants to Local Educational Agencies (LEAs)
  • The FY 2027 request includes $18.42 billion for Title I Grants to LEAs, flat from FY 2026 and $20 million above FY 2025.
  • The request maintains Title I as a core federal investment for high-poverty schools and continues to give LEAs broad flexibility to direct funds toward their students' academic needs.
• Make Education Great Again (MEGA)
  • The FY 2027 request includes $2 billion for the newly proposed MEGA program.
  • MEGA would consolidate 17 existing K-12 formula and competitive grant programs into a single state formula grant, with at least 25 percent reserved for evidence-based literacy activities and at least 25 percent reserved for evidence-based mathematics activities.
• Charter Schools Grants
  • The FY 2027 request includes $500 million for Charter Schools Grants, flat from FY 2025.
  • The request proposes targeted changes to expand state flexibility, including broader authority for state entity grantees to issue subgrants, expanded eligibility for facilities support and up to a 100 percent federal share for certain facility aid in the first two project years.
• Impact Aid
  • The FY 2027 request includes $1.63 billion for Impact Aid, a $5 million increase over FY 2025.
  • Within that total, the request provides $1.47 billion for Basic Support Payments, $49.3 million for Payments for Children with Disabilities, $4.8 million for Facilities Maintenance, $19 million for Construction and $80 million for Payments for Federal Property.
• Indian Education
  • The FY 2027 request includes $196.7 million for Indian Education, a $2 million increase over FY 2025.
  • The total includes $110.4 million for grants to LEAs, $72 million for Special Programs for Indian Children and $14.4 million for National Activities.
• Comprehensive Literacy State Development Grants
  • The FY 2027 request includes $0 for Comprehensive Literacy State Development Grants, compared with $198.5 million in FY 2025.
  • The administration proposes folding this activity into the new MEGA program rather than continuing it as a stand-alone grant.
• Innovative Approaches to Literacy
  • The FY 2027 request includes $0 for Innovative Approaches to Literacy, compared with $25.5 million in FY 2025.
  • The proposal would consolidate this program into MEGA.
• Neglected, Delinquent, and At-Risk Children and Youth
  • The FY 2027 request includes $0 for Neglected, Delinquent, and At-Risk Children and Youth, compared with $49.2 million in FY 2025.
  • The administration proposes consolidating this program into MEGA.
• Special Programs for Migrant Students
  • The FY 2027 request includes $0 for Special Programs for Migrant Students, compared with $52.1 million in FY 2025.
  • The administration proposes eliminating this program.
• Supporting Effective Instruction State Grants
  • The FY 2027 request includes $0 for Supporting Effective Instruction State Grants, compared with $2.19 billion in FY 2025.
  • The administration proposes consolidating these funds into MEGA and giving states more discretion over how they are used.
• 21st Century Community Learning Centers
  • The FY 2027 request includes $0 for 21st Century Community Learning Centers, compared with $1.32 billion in FY 2025.
  • The request would consolidate this program into MEGA.
• State Assessments
  • The FY 2027 request includes $0 for State Assessments, compared with $380 million in FY 2025.
  • The FY 2025 level consisted of $369.1 million for State Assessment Grants and $10.9 million for Competitive Assessment Grants; both would be folded into MEGA under the proposal.
• Education for Homeless Children and Youths
  • The FY 2027 request includes $0 for Education for Homeless Children and Youths, compared with $129 million in FY 2025.
  • The administration proposes consolidating this program into MEGA.
• Alaska Native Education
  • The FY 2027 request includes $0 for Alaska Native Education, compared with $45 million in FY 2025.
  • The proposal would consolidate this program into MEGA.
• Rural Education
  • The FY 2027 request includes $0 for Rural Education, compared with $220 million in FY 2025.
  • The administration proposes consolidating this program into MEGA.
• Student Support and Academic Enrichment Grants
  • The FY 2027 request includes $0 for Student Support and Academic Enrichment Grants, compared with $1.38 billion in FY 2025.
  • Under the proposal, this program would be consolidated into MEGA.
• American History and Civics Education
  • The FY 2027 request includes $0 for American History and Civics Education, compared with $162.9 million in FY 2025.
  • The request would consolidate this program into MEGA.
• Magnet Schools Assistance
  • The FY 2027 request includes $0 for Magnet Schools Assistance, compared with $124.7 million in FY 2025.
  • The administration proposes consolidating the program into MEGA.
• Arts in Education
  • The FY 2027 request includes $0 for Arts in Education, compared with $33.7 million in FY 2025.
  • The administration proposes consolidating the program into MEGA.
• Javits Gifted and Talented Education
  • The FY 2027 request includes $0 for Javits Gifted and Talented Education, compared with $7.9 million in FY 2025.
  • The program would be consolidated into MEGA under the proposed budget.
• Statewide Family Engagement Centers
  • The FY 2027 request includes $0 for Statewide Family Engagement Centers, compared with $16.6 million in FY 2025.
  • The administration proposes consolidating family engagement activities into MEGA.
• School Safety National Activities
  • The FY 2027 request includes $0 for School Safety National Activities, compared with $216 million in FY 2025.
  • The proposal would consolidate these activities into MEGA.
• Promise Neighborhoods
  • The FY 2027 request includes $0 for Promise Neighborhoods, compared with $91 million in FY 2025.
  • The administration proposes consolidating the program into MEGA.
• Migrant Education
  • The FY 2027 request includes $0 for Migrant Education, compared with $375.6 million in FY 2025.
  • The administration proposes eliminating this program for FY 2027.
• Training and Advisory Services
  • The FY 2027 request includes $0 for Training and Advisory Services, compared with $6.6 million in FY 2025.
  • The administration proposes eliminating the program as part of its broader streamlining effort.
• Comprehensive Centers
  • The FY 2027 request includes $0 for Comprehensive Centers, compared with $50 million in FY 2025.
  • The request would eliminate the program and shift responsibility away from the federal level.
• Education Innovation and Research (EIR)
  • The FY 2027 request includes $0 for EIR, compared with $259 million in FY 2025.
  • The administration proposes eliminating the program.
• Teacher and School Leader Incentive Grants
  • The FY 2027 request includes $0 for Teacher and School Leader Incentive Grants, compared with $10 million in FY 2025.
  • The request would eliminate the program.
• Supporting Effective Educator Development (SEED)
  • The FY 2027 request includes $0 for SEED, unchanged from $0 in FY 2025.
  • The administration does not propose funding for the program in FY 2027.
• Ready to Learn (RTL) Programming
  • The FY 2027 request includes $0 for RTL Programming, unchanged from $0 in FY 2025.
  • No separate FY 2027 funding is proposed.
• Full-Service Community Schools (FSCS)
  • The FY 2027 request includes $0 for FSCS, compared with $150 million in FY 2025.
  • The administration proposes eliminating the program.
• English Language Acquisition
  • The FY 2027 request includes $0 for English Language Acquisition, compared with $890 million in FY 2025.
  • The request would eliminate this stand-alone program as part of its overall restructuring of K-12 formula funding.

Special Education

• Special Education Overall
  • The FY 2027 request includes $16.02 billion for Special Education, an increase of $561.6 million over FY 2025.
  • The proposal centers on a significant increase for Individuals with Disabilities Education Act (IDEA) formula grants while consolidating a number of smaller IDEA programs into the main state grant structure.
• IDEA Grants to States
  • The FY 2027 request includes $15.4 billion for IDEA grants to states, an increase of $1.2 billion over FY 2025 and the highest regular funding level proposed for the program.
  • The request would consolidate several IDEA programs into grants to states and give states additional flexibility, while maintaining core IDEA accountability and reporting requirements.
• Preschool Grants
  • The FY 2027 request includes $0 for Preschool grants, compared with $420 million in FY 2025.
  • The program would be consolidated into IDEA grants to states under the proposal.
• Grants for Infants and Families
  • The FY 2027 request includes $590 million for grants for Infants and Families, a $50 million increase over FY 2025.
  • The increase is intended to strengthen early intervention services and help states act earlier to identify and support infants and toddlers with disabilities.
• State Personnel Development
  • The FY 2027 request includes $0 for State Personnel Development, compared with $38.6 million in FY 2025.
  • The proposal would consolidate the program into IDEA grants to states.
• Technical Assistance and Dissemination
  • The FY 2027 request includes $0 for Technical Assistance and Dissemination, compared with $39.4 million in FY 2025.
  • The request would move these activities into IDEA grants to states.
• Personnel Preparation
  • The FY 2027 request includes $0 for Personnel Preparation, compared with $115 million in FY 2025.
  • The administration proposes consolidating the program into IDEA grants to states.
• Parent Information Centers
  • The FY 2027 request includes $0 for Parent Information Centers, compared with $33.2 million in FY 2025.
  • The program would be consolidated into IDEA grants to states.
• Educational Technology, Media, and Materials
  • The FY 2027 request includes $0 for Educational Technology, Media, and Materials, compared with $31.4 million in FY 2025.
  • These activities would also be folded into IDEA grants to states.
• Special Olympics Education Program
  • The FY 2027 request includes $38 million for the Special Olympics Education Program, an increase from $36 million in FY 2025 and level with FY 2026.
  • The request maintains support for school-based and classroom-connected Special Olympics activities.

Rehabilitation Services

• Rehabilitation Services Overall
  • The FY 2027 request includes $4.67 billion for Rehabilitation Services, an increase of $145.9 million over FY 2025.
  • The request is driven primarily by the mandatory increase in Vocational Rehabilitation State Grants, while several smaller discretionary programs are not funded.
• Vocational Rehabilitation State Grants
  • The FY 2027 request includes $4.62 billion in mandatory funding for Vocational Rehabilitation State Grants, up from $4.39 billion in FY 2025.
  • The request continues the program's central role in helping individuals with disabilities prepare for, secure and retain employment.
• Client Assistance State Grants
  • The FY 2027 request includes $0 for Client Assistance State Grants, compared with $13 million in FY 2025.
  • The proposal would allow states to support client assistance activities using Vocational Rehabilitation State Grant funds instead.
• Training
  • The FY 2027 request includes $0 for Training, compared with $29.4 million in FY 2025.
  • The administration proposes eliminating the stand-alone program.
• Demonstration and Training
  • The FY 2027 request includes $0 for Demonstration and Training, compared with $5.8 million in FY 2025.
  • The request would eliminate the program.
• Supported Employment State Grants
  • The FY 2027 request includes $0 for Supported Employment State Grants, compared with $22.5 million in FY 2025.
  • The administration notes that supported employment activities could continue through the larger Vocational Rehabilitation State Grants program.
• Independent Living Services for Older Blind Individuals
  • The FY 2027 request includes $33.3 million for Independent Living Services for Older Blind Individuals, flat from FY 2025.
  • The request maintains this program as a dedicated source of support for older adults with severe visual impairments.
• Protection and Advocacy of Individual Rights (PAIR)
  • The FY 2027 request includes $0 for PAIR, compared with $20.2 million in FY 2025.
  • The administration proposes eliminating the program.
• Helen Keller National Center for Deaf-Blind Youths and Adults
  • The FY 2027 request includes $20 million for the Helen Keller National Center, an increase of $1 million over FY 2025.
  • The request maintains a national service model that combines direct support, training, counseling and technical assistance.
• Special Institutions for Persons with Disabilities
  • The FY 2027 request includes $303.3 million total for the Special Institutions for Persons with Disabilities, flat from FY 2025.
  • That total includes $43.4 million for the American Printing House for the Blind, $92.5 million for the National Technical Institute for the Deaf and $167.4 million for Gallaudet University.
• American Printing House for the Blind
  • The FY 2027 request includes $43.4 million for the American Printing House for the Blind, flat from FY 2025.
  • The funding would continue support for specialized educational materials and related services for students who are visually impaired.
• National Technical Institute for the Deaf (NTID)
  • The FY 2027 request includes $92.5 million for NTID, flat from FY 2025.
  • The request maintains support for postsecondary technical education, training and related services for students who are deaf or hard of hearing.

Career, Technical, and Adult Education

• Career, Technical, and Adult Education Overall
  • The FY 2027 request includes no funding in the ED account for Career, Technical, and Adult Education.
  • The budget states that these programs would be administered under the U.S. Department of Labor (DOL) rather than ED for FY 2027.
• Career and Technical Education (CTE)
  • The FY 2027 request includes $0 for CTE within ED, compared with $1.45 billion in FY 2025.
  • The FY 2025 level included $1.43 billion for CTE State Grants and $12.4 million for National Programs; both are proposed under DOL for FY 2027.
• Adult Education
  • The FY 2027 request includes $0 for Adult Education within ED, compared with $729.2 million in FY 2025.
  • The FY 2025 level included $715.5 million for Adult Education State Grants and $13.7 million for National Leadership Activities, which are likewise proposed under DOL for FY 2027.

Volume 2

• Student Aid Overview
  • Pell Grant funding shifts significantly, with discretionary funding rising from $22.5 billion in FY 2026 to $33 billion in FY 2027 (an increase of $10.5 billion) to maintain the $7,395 maximum award, while mandatory funding drops from $19.1 billion to $7.7 billion.
  • Supplemental Educational Opportunity Grant (SEOG) is eliminated, falling from $910 million in FY 2026 to $0 in FY 2027.
  • Federal Work-Study is reduced sharply from $1.23 billion to $123 million, alongside a major policy shift requiring employers to cover 90 percent of student wages, reversing the long‑standing federal cost‑
  • Total new federal student aid declines, from $132.1 billion in FY 2026 to $124.4 billion in FY 2027, driven by reductions in campus‑based aid and lower projected loan volume.
  • Direct Loan program costs swing dramatically, shifting from a $35.7 billion negative subsidy in FY 2026 to a $22.5 billion positive subsidy in FY 2027, reflecting substantial changes in repayment and cost assumptions.
  • Grad PLUS loan volume drops steeply from $12.4 billion in FY 2026 to $6.4 billion in FY 2027, contributing to the overall decline in new loan aid.
• Student Financial Assistance
  • Grant aid reaches fewer students overall. Pell recipients rise slightly, but elimination of campus‑based grants reduces total grant recipients from 9.9 million in FY 2026 to 8.4 million in FY 2027.
• Teacher Education Assistance for College and Higher Education (TEACH) Grants
  • TEACH Grant funding shifts. The estimated loan subsidy amount for fiscal year 2027 is $39.8 million.
  • Lower grant‑to‑loan conversions continue to raise program costs. The Department attributes higher recent subsidy levels to fewer TEACH Grants converting to loans, following regulatory and statutory changes that simplified certification and expanded qualifying service pathways. The Department now projects 53 percent of FY 2027 awards will convert to loans.
  • Program participation and aid levels remain stable in FY 2027. TEACH Grants are expected to support about 26,200 recipients at roughly 700 institutions, with $78.1 million in aid available and the maximum award unchanged at $4,000.
• Student Loans Overview
  • Student loan costs rise sharply in FY 2027. The Direct Loan program shifts from a $35.7 billion subsidy in FY 2026 to a $22.5 billion cost in FY 2027, largely because FY 2026 benefited from large downward re-estimates that are not repeated.
  • New loan volume declines in FY 2027. Total new Direct Loans fall from $90 billion to $83.6 billion, driven principally by steep reductions in graduate and parent borrowing following statutory loan limit changes.
  • Working Families Tax Cuts Act (WFTCA) reforms begin reshaping the loan program. New repayment plans and borrowing limits taking effect in July 2026 contribute to lower loan volumes and altered subsidy projections in FY 2027.
• Higher Education
  • Total FY 2027 funding falls to $725.1 million, a $2.6 billion reduction from FY 2025, representing a major restructuring of the federal higher education portfolio.
  • Most discretionary higher education programs are eliminated in FY 2027, including TRIO, Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP), Graduate Assistance in Areas of National Need (GAANN), International Education programs, Fund for the Improvement of Postsecondary Education (FIPSE), Teacher Quality Partnership and Hawkins Centers of Excellence.
  • Eliminations are driven in part by legal determinations concluding that several race‑based eligibility programs are unconstitutional and inseverable.
  • Remaining funding is consolidated around Historically Black Colleges and Universities (HBCU) and Tribally Controlled Colleges, primarily through Titles III‑B and VII programs.
  • Mandatory funding under the Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act continues in FY 2027, but only $115 million of the $155 million available is requested.
  • The administration frames FY 2027 changes as restoring fiscal discipline, reducing duplication and shifting responsibility to states, institutions and the private sector.
• Howard University
  • FY 2027 funding decreased by $50 million to $254 million.
  • Core academic and operational support remains stable in FY 2027, with $226.7 million for general support and $27.3 million for hospital operations.
  • At least $3.4 million in FY 2027 is reserved for the matching endowment, requiring a dollar‑for‑dollar institutional match.
• College Housing and Academic Facilities Loans Program Account
  • Flat FY 2027 funding at $298,000 for administrative costs, and no new lending authority – the program continues in wind‑down mode managing legacy loans.
  • Legacy loan portfolio continues to decline from FY 2025 to FY 2027, with outstanding loans falling from 15 to 11 and principal dropping from $8.8 million to $7.1 million.
• HBCU Capital Financing Program Account
  • $20.7 million total FY 2027 request, including $20.2 million for loan subsidy and $528,000 for administration is sufficient to guarantee up to $389 million in new loans.
  • Loan activity increases from FY 2025 to FY 2027, with new loans rising from 3 to 4 and total new loan volume growing from $187 million to $302 million.
  • Continues expanded program flexibility in FY 2027, including lifted restrictions on public versus private HBCU lending and continued eligibility for Howard University.
• Institute of Education Sciences (IES)
  • FY 2026 funding for IES drops to $261.3 million, a $531.8 million reduction from FY 2024 enacted levels, with implications for staffing and administrative support.
  • Administrative expenses are maintained only for statutory requirements, including National Assessment of Educational Progress, National Center for Education Statistics data collections and core evaluation functions.
  • Federal education research activities are significantly narrowed, with emphasis on compliance, data continuity and short‑term obligations.
• Salaries and Expenses Overview
  • Total FY 2027 salaries and expenses request is $2.35 billion, a $381.7 million reduction from FY 2025, reflecting a substantially downsized departmental operational footprint.
  • Department-wide Full-Time Equivalent (FTE) levels decline from 3,544 in FY 2025 to approximately 1,946 in FY 2027, a reduction of more than 45 percent.
  • Reductions are concentrated in Program Administration, Office of Civil Rights (OCR) and Student Aid Administration, consistent with the administration's stated goal of winding down or consolidating federal education functions.
  • Personnel compensation and benefits total $509.5 million in FY 2027, down $273.9 million from FY 2025, while non‑personnel costs fall to $1.8 billion, down $107.8 million.
  • Centralized services and enterprise information technology (IT) investments are sharply reduced in FY 2027, with funding focused on cybersecurity, continuity of operations and legally required systems.
  • Student Aid Administration remains flat at $2.06 billion between FY 2025 and FY 2027, with internal reallocation toward loan servicing activities.
• Program Administration
  • FY 2027 request is $100 million, a $319.9 million reduction from FY 2025, representing an approximate 76 percent cut to the account.
  • Program Administration FTEs drop from 1,327 in FY 2025 to 231 in FY 2027, an 83 percent reduction.
  • Funding is limited to continuity, internal controls and wind‑down activities, with routine operations, modernization and discretionary support largely eliminated.
  • Non‑personnel funding falls nearly 80 percent, reflecting reduced contracts, IT services, travel, rent and training.
  • Remaining resources are aligned with executive order-directed restructuring and departmental closure activities.
• OCR
  • FY 2027 request totals $91 million, a $49 million decrease from FY 2025.
  • OCR staffing is reduced from 530 FTEs in FY 2025 to 271 FTEs in FY 2027, a cut of 259 positions.
  • Personnel compensation and benefits decline by $43.4 million, driven primarily by reduced enforcement staffing.
  • Non‑personnel funding is prioritized for the Civil Rights Data Collection, case management systems and required travel for investigations.
  • The administration emphasizes continued enforcement of core civil rights statutes, but at a significantly reduced operational scale.
• Office of Inspector General (OIG)
  • FY 2027 request is $60.8 million, a $6.8 million decrease from FY 2025.
  • Funding supports up to 175 FTEs in FY 2027, down slightly from FY 2025 levels.
  • Approximately 69 percent of FY 2027 funding supports personnel compensation and benefits, with the remainder allocated to oversight‑related non‑personnel costs, including IT systems.
  • OIG resources remain focused on high‑risk oversight areas, including student financial assistance, grantee monitoring, IT security and fraud prevention.
  • Two‑year availability for $3 million of FY 2027 funds is retained to manage audit and IT cost volatility.
• General Provisions
  • FY 2027 General Provisions largely extend prior‑year authorities, maintaining standard ED operational flexibilities with limited policy changes.
  • Transfer and evaluation authorities continue in FY 2027, including up to 1 percent transfer authority and the ability to reserve up to 0.5 percent of eligible HEA funds for pooled evaluations, with extended availability.
  • Targeted extensions and special authorities are included, such as continued use of Title III/V endowment income for scholarships, extensions for National Advisory Committee on Institutional Quality and Integrity and guaranty agency fees, and authority to transfer up to $250 million for Gallaudet University construction.

For more information or questions, please contact the authors.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.