These 12 States Are Most Affected by Federal Education Funding Cuts
By Kaitlyn Chantry and Kira FitzGerald
Recent moves on both sides of the aisle show that lawmakers may not be in favor of the Trump administration’s agenda to reduce federal spending on public education. On July 31st, the bipartisan Senate Appropriations Committee voted 26-3 in favor of a bill that rejects most of Trump’s recommended $4.5 billion cuts to K-12 education and, in fact, increases funding to Title I and IDEA.
Yet, with the budget not due to go into effect until October 1st (and the full Senate and House still needing to weigh in) there’s ample opportunity for federal cuts to go back on the table.
And while the overall amount of money may not seem like a lot compared to total education funding, reductions, impoundments, and rescissions in federal education funding disproportionately impact some states, some schools, and some students more than others.
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As we look ahead to two more months of discussion and debate, we analyzed three significant factors that affect how keenly each state experiences disruptions or reductions in federal funding:
- States like Arizona and Oklahoma, which spend less on education overall, rely more heavily on federal funding generally. We looked at the proportion of total education funding represented by federal dollars.
- In states like New Mexico and North Carolina, many districts in the state serve a high percentage of students living in poverty. This means many more districts are affected when federal funding declines.
- And in states like Louisiana and Alabama, where the vast majority of the state’s children attend school in high-poverty districts, many more families are impacted.
Use the links above if you’d like to read more about a particular factor or skip ahead to see which states stand at the intersection of all three factors and are most heavily impacted by shifts in federal funding.
Factor 1: How Much of Each State’s Education Funding Is Federal?
First, it’s important to note that federal funding has an impact on all states. New Jersey, which has one of the highest per-pupil state budgets for education, still receives over $1.8 billion each year in federal education funding. And in high-need districts in every single state, federal funds are a significant portion of the district’s budget.
However, where less overall education funding comes from state and local sources, federal funding represents a higher proportion of the state’s overall education revenue. Simply put, some states rely more on this funding than others.
The map below may explain in part why some senators sent a letter on July 16th asking that frozen federal funds be released: Alaska (Sen. Lisa Murkowski), South Dakota (Sen. Mike Rounds), North Dakota (Sen. John Hoeven), and West Virginia (Sens. Shelley Moore Capito and Jim Justice) are all in the top ten when it comes to proportional reliance on federal education funding.
Note: These percentages include all federal funding that goes to public K-12 districts, including reimbursements via Medicaid and SNAP. (Medicaid and SNAP were reduced in the “One Big Beautiful Bill” Act and are likely to have a direct impact on schools.)
Federal Funds as a Percentage of Total Education Revenue
Federal funds as a percentage of total state education revenue, with ESSER removed to more accurately approximate future funding proportions (Source: NCES 2021-22 National Public Education Financial Survey)
Factor 2. How Many Districts Serve Students Living in Poverty?
Generally speaking, districts serving a high proportion of students living in poverty rely the most on federal funding. This is by design: federal grants are intended to serve high-need districts and high-need students.
In some states, poverty—one significant indicator of student need—is concentrated in only a handful of districts. This means that state education agencies could, in theory, more easily target a few key districts when it comes to offering support and guidance on how to make up for any reductions or delays in federal funding.
Idaho, for instance, has a relatively high proportion of education revenue coming from federal funding sources, but only 8% of the state’s districts serve a high percentage of students living in poverty. By contrast, consider that 81% of Louisiana’s 69 public school districts qualify as “high-need” according to this same metric. That represents a significant challenge for Louisiana should federal funding decline in the 2026-27 budget proposal.
Percentage of districts serving high concentrations of students living in poverty
Percentage of districts with more than 20% of students living in poverty. (Source: U.S. Census Bureau SAPIE School District Estimates for 2023) Note: As a single-district state, Hawai’i does not qualify for this factor.
Factor 3: How Many Students Attend a “High-Need” District?
Even in a state where relatively few districts are serving high concentrations of students living in poverty, it’s possible that those few districts actually serve a large percentage of the state’s students overall.
Consider New York. Though only 12% of the state’s districts are “high-need,” the city of New York alone serves over a million students. This means that over 50% of the state’s children attend school in a high-need district—regardless of whether they’re living in poverty themselves.
For these states, the need may not be as widely distributed, but many students attend a school that receives significant federal funding. That means that many of these states’ families, regardless of income level, stand to be impacted by any loss in federal funding—for instance, if schools need to eliminate staff positions or cancel programs.
Percentage of total students being served in a higher-need district
Percentage of that state’s students who attend districts with more than 20% of students living in poverty. (Source: U.S. Census Bureau SAPIE School District Estimates for 2023) Note: As a single-district state, Hawai’i does not qualify for this factor.
Which States Face the Most Complex Challenge?
12 states rank high in all three of the factors in our analysis and face compounding challenges in trying to serve their highest-need children whenever federal funding is decreased or disrupted. Those states are Alabama, Arkansas, Kentucky, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, and West Virginia.
Visualization of which states are most heavily impacted by reductions or disruptions in federal funding. All three factors heavily impact the twelve states in the center. (Source: Education Resource Strategies, 2025)
What does it mean to rank high in all three risk factors?
Take Mississippi, for example. Mississippi schools receive nearly $1 billion per year in federal funding, 75% of the state’s districts serve high concentrations of children living in poverty, and over half of the state’s students attend one of these higher-need districts. This leaves Mississippi district leaders scrambling in scenarios like the recent funding freeze, when some simply spent the money anyway, hoping they would eventually be reimbursed.
And while Mississippi was not one of the states that protested the July funding freeze, Sen. Cindy Hyde-Smith (R-Miss.) is one of the 26 senators who approved the budget proposal that rejects Trump’s cuts to federal education spending. And, according to her website, Sen. Hyde-Smith “believes in the importance of state and local control of public education, while recognizing the role of the federal government to support educational achievement across the country.”
In fact, of the 12 most at-risk states in our analysis, 10 have members on the Senate Appropriations Committee and all but Sen. Bill Hagerty (R.-Tenn.) voted in favor of the new proposal. If federal funding comes under attack in the next iterations of the budget, these will be the twelve states to watch.
Other Factors
While the factors above significantly impact how declines or disruptions in federal funding are felt by states, the overall picture is, of course, complex. Here are just a few other considerations:
- These numbers are based on ’21-’22 state education revenue (with ESSER dollars removed). Some states—such as Mississippi—have received funding boosts since 2022, but the additional money is unlikely to impact the state’s overall risk.
- Many states will face additional financial challenges due to enrollment decline, local economic conditions, and the impact of other federal funding cuts (like SNAP and Medicaid). These challenges will likely exacerbate conditions for some states more sharply.
- Some states or districts may have more funding held in reserve, which can help district leaders weather short-term disruptions (like the July funding freeze), but does not prevent students and families from being affected by permanent reductions in federal aid.