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Here's how much Minnesota school districts are each losing after Trump cuts • Minnesota Reformer [1]

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Date: 2025-07-16

Minnesota school districts are waiting on over $74 million in federal education funding after the U.S. Department of Education failed to provide states with information about their grant awards by July 1.

On Monday, Minnesota Attorney General Keith Ellison joined a lawsuit with 22 other state attorneys general suing to unblock the funds.

The withheld funds are part of federal education grants known as title grants. Although Title I, the largest of the federal grants, is not affected, the fed’s move does impact parts of Titles II, III and IV.

Minneapolis Public Schools, the state’s fourth largest school district, said in a statement that it is still assessing the potential impact. The statement says about $4.5 million is being withheld from the district, whose annual operating budget is roughly $725 million.

St. Paul Public Schools has had $7.2 million in funding held back. The district, whose annual budget is about $750 million, has imposed a hiring freeze while it sorts out the impact.

Tom Sager, head of finance for St. Paul Public Schools, said in an interview that the district is not currently planning to make any changes to its programs or services for next school year. He said the district maintains reserve funds and will use these to pay for services typically covered by the withheld funds.

“School districts’ budgets are already stretched and every dollar does matter in terms of program delivery and opportunities for students,” Sager said.

Sager estimates that about 20,000 or more students in St. Paul Public Schools are entitled to the services the withheld funding pays for, because they qualify as low-income or English learners. The federal funds also allow the district to allocate its unrestricted state and local funds to things that affect all students, like lowering class sizes, he said.

In St. Paul, Sager estimates the federal funds pay for up to 60 employees out of around 6,000 district employees.

The Minnesota Department of Education has not provided school districts with guidance about how to handle the withheld funding, according to Sager.

Willie Jett, the state commissioner of the Department of Education, sent a letter to Secretary of Education Linda McMahon on June 26, asking for the funding to be released before the July 1 deadline. On July 3, a statement from the federal Office of Management and Budget said the funds were being withheld because districts were using the money in ways contrary to the administration’s agenda.

The amount of the grants is determined by formulas that were most recently approved by Congress and President Trump in March 2025 as part of a continuing resolution to fund the federal government. Under current law, the executive branch does not have legal authority to cancel appropriations made by Congress.

(The Supreme Court ruled in a different Department of Education case this week that the Trump administration, for now, can proceed with mass layoffs and a plan to dramatically downsize the U.S. Department of Education ordered earlier this year, but the grant funding issue has not been adjudicated yet.)

Districts receive funding based on a mixture of factors including enrollment, poverty level and number of students learning English.

School districts can spend the funds in several ways. Some of the uses include teacher professional development; class size reductions; improving academic outcomes; after school programs; providing services for students learning English; as well as providing services for students whose parents work in seasonal jobs.

The impact of the funding is not just on public school districts. A portion of the withheld funds, known as Title IV part B, is also used by non-public schools, faith-based organizations and community organizations to provide services for children outside of the school day. And some of the funding for adult basic education funds programs at community colleges.

Minnesota’s largest school districts are missing out on the most funding, according to data from New America, a think tank. About one quarter of the funding withheld from Minnesota school districts is owed to just three districts: Anoka-Hennepin Public Schools, St. Paul and Minneapolis, which are the largest, second and fourth largest districts in the state, respectively.

Although the withheld funding makes up a small percentage of the overall budgets for the impacted districts, educators fear that this is just the start, while also noting the constitutional question at play.

“There’s also a bigger picture here,” Sager said. “Congress controls these funds. And then they’re withheld (by Trump). There’s a concern about the process of that, too. We’re focused on students and their families, but that’s another element as a citizen.”

Small districts are at risk, too: Some that lose the most funding per pupil are rural districts with relatively few students. This is because some of the title grants provide a minimum amount per school district, not just per pupil amounts.

Faribault Public Schools could lose as much as $300,000. In a statement, Jamie Bente, the superintendent, said the district would have to make cuts or shift money to backfill: “Either of which would have an impact on our students, our staff, or both,” Bente said.

Federal money accounts for about 10% of funding for public education in Minnesota. With the state facing a multibillion-dollar budget deficit in the next biennium, and schools already making significant cutbacks, districts will struggle to replace the lost federal money with state and local revenue.

Minnesota school districts must have a board-approved balanced budget in place by July 1, the start of their fiscal year. Unless the funds are released soon, school districts face the prospect of re-working the budgets they just approved to account for the lost funding.

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[1] Url: https://minnesotareformer.com/2025/07/16/heres-how-much-minnesota-school-districts-are-each-losing-after-trump-cuts/

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