Labor’s Takeover of K–12 Grants Hits Early Snags, Stoking Fears About Title I Move

States that normally receive federal education funds in July to hire staff, run summer programs and train teachers faced months-long delays this year after responsibility for career and technical education (CTE) grants was shifted to the U.S. Department of Labor. The transfer, part of the administration’s plan to move K–12 programs out of the Department of Education, exposed technical problems and raised concerns about managing much larger programs such as Title I.

What went wrong

Several state education agencies reported that the Labor Department’s grant portal initially failed to recognize their bank-account information. "We were in this endless loop of having to re-verify our account number," said Richard Kincaid, assistant state superintendent for college and career pathways at the Maryland State Department of Education. Maryland advanced roughly $22 million in state funds while waiting for federal reimbursements.

Labor officials said they worked with nine states to resolve account verification issues and, as of the most recent update, staff had processed 568 payment requests totaling more than $227 million for 40 states and territories. Still, some states continued to report errors: Rhode Island received messages that its organization name did not match records, and other states reported delayed communication with federal staff.

Why this matters

Perkins V, the statute that funds CTE, appropriates about $1.4 billion annually — a fraction of Title I’s roughly $18 billion budget, which serves about 26 million low-income students. An internal Education Department memo described moving CTE as "miniscule" compared with migrating larger formula and competitive grants. Officials and education leaders warn that the technical hurdles experienced so far could presage much greater challenges if Title I and other major K–12 programs are moved to Labor.

"We’re not talking about how to support a 28-year-old walking into an American job center looking for the next thing," Kincaid said. "We’re talking about kids."

Mission mismatch concerns

Beyond technical difficulties, educators argue the Labor and Education departments have different core missions. Labor historically prioritizes job training and services for unemployed adults. Some CTE and adult-education leaders worry that moving K–12 programs into an agency focused on workforce placement could shift priorities away from broader educational goals, including literacy and college readiness.

Amy Loyd, former assistant secretary for CTE and adult education during the Biden administration, noted many adult-education participants seek literacy and life-skill improvements rather than workforce credentials. Others warned the shift could inadvertently revive old vocational "tracking" practices that concentrated lower-income students and students of color into narrow, low-mobility career paths — a development modern CTE has tried to avoid.

Operational and staffing issues

State officials also lament the loss of long-standing working relationships: the Education Department’s CTE team shrank from roughly 15 staffers to about five during the transfer, and some state directors say communication has been limited. The Employment and Training Administration manages about $3–4 billion in grants a year, compared with roughly $28 billion overseen by the Office of Elementary and Secondary Education, highlighting differences in scale and expertise.

Complicating the transition, Education Secretary Linda McMahon attempted to lay off many remaining elementary and secondary staff during a shutdown; a federal court blocked the layoffs, and the agreement to reopen the government required those employees to return to work at least through the end of January.

Outlook

Officials argue the problems are temporary and defend the move as a step toward efficiency. John Pallasch, who led the Employment and Training Administration during the prior administration, said Labor is experienced in grants management and expected hiccups to be resolved. Critics, however, worry that moving larger programs such as Title I could create significant operational risk and shift K–12 policy priorities toward an adult workforce orientation.

After months of canceled grants, temporary freezes and other disruptions, some district leaders say they are bracing for continued uncertainty. "I expect Labor will have a hard time managing Title I allocations for next year," said Jeremy Vidito, chief financial officer for Detroit Public Schools. "They want the system to fail so they can... shift funds to private schools or just give the money back to taxpayers," he added, reflecting broader political concerns about the long-term implications of the reorganization.

As federal agencies finalize interagency agreements and work through technical issues, states and educators will be watching closely to see whether the transfer improves efficiency without sacrificing programmatic focus or stability for the students who depend on these funds.