Department of Education Cuts: What Board Members Need to Know About Funding Risk

In a seismic shift for educational funding and oversight, the U.S. Department of Education announced this week that it is laying off nearly half its staff, reducing its workforce to approximately 2,183 employees – down from 4,133 when President Trump took office in January (Reuters, 2025). This dramatic reduction represents a critical juncture for nonprofit organizations, educational institutions, and other entities that rely on federal education funding.

Understanding the Current Situation

Secretary of Education Linda McMahon has been explicit about the department's "final mission," with these layoffs serving as a precursor to potentially dismantling the department entirely (AP News, 2025). While eliminating the department would require an act of Congress, the current administration has already begun redistributing responsibilities and reconsidering how federal education dollars flow.

Most concerning for funding recipients is that the cuts are affecting every division within the department. According to Disability Scoop (2025), officials have indicated they would maintain statutory programs including formula funding, competitive grantmaking, and "funding for special needs students." However, Secretary McMahon's apparent unfamiliarity with critical programs like IDEA (Individuals with Disabilities Education Act) raises serious questions about implementation.

Risk and Exposure for Funding Recipients

For organizations receiving Department of Education funding, these changes create unprecedented uncertainty and risk exposure:

1. Oversight and Compliance Gaps: With fewer staff handling compliance and oversight, organizations may face inconsistent guidance, delayed responses to inquiries, and shifting enforcement priorities.
2. Funding Stability Concerns: While statutory funding programs remain in place for now, the administration has signaled intentions to redirect federal education dollars. Secretary McMahon has proposed moving IDEA oversight to the Department of Health and Human Services and sending the Office for Civil Rights to the Department of Justice (Disability Scoop, 2025).
3. Reporting and Accountability Changes: Organizations may soon need to adapt to new reporting structures, potentially dealing with different agencies for programs previously managed under one department.
4. Heightened Scrutiny on Content: The administration has explicitly stated intentions to redirect funding based on curriculum content, particularly targeting institutions perceived as promoting certain diversity initiatives (AP News, 2025).

SOAR's Perspective: Board Responsibility During Federal Transition

At SOAR Partners, we believe this federal transition creates an urgent imperative for boards to conduct comprehensive risk assessments. Board members have fiduciary responsibilities that extend to understanding and mitigating funding vulnerabilities.

The reality is stark: many organizations dependent on Department of Education funding will face disruptions. Some funding streams will not survive this transition intact. Boards that fail to prepare for this new reality could face significant legal and financial exposure.

Even if funding continues, it may come with new strings attached or require interfacing with entirely different federal entities. This transition period will test the agility and foresight of governing boards across the educational and nonprofit landscape.

Taking Action: Board-Level Risk Assessment

SOAR Partners specializes in helping boards navigate precisely this type of systemic change. We recognize that many organizations lack the internal capacity to rapidly assess their exposure to federal funding shifts.

To address this urgent need, SOAR is offering streamlined risk assessment services specifically designed for boards of organizations receiving Department of Education funding. These targeted assessments help boards understand:

• The vulnerability profile of specific funding streams
• Strategic options for diversifying revenue
• Compliance implications during the transition period
• Documentation and reporting adaptations needed

For a limited time, we're offering these assessments at a significantly reduced investment to help organizations respond quickly to this evolving situation.

Contact us at info@soar.partners to schedule a consultation and ensure your board is fulfilling its duty of care during this period of unprecedented change in federal education funding.

References:
Disability Scoop. (2025, March 12). As Education Department Slashes Nearly Half Its Staff, Special Ed Worries Mount.
Reuters. (2025, March 12). US Education Department to cut half its staff as Trump eyes its elimination.
AP News. (2025, March 12). Trump is dismantling the Education Department. Here's what it does.

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