WASHINGTON, D.C. — The U.S. Department of Education distributed more than $3.4 billion in federal education grants through other agencies during fiscal 2026, advancing an administrative restructuring that shifts responsibility for delivering education funding to the departments of Labor and Health and Human Services while directing more grants toward state agencies and workforce programs.
The department’s year-end report outlined changes to federal grant administration, including $2 billion in career and adult education payments, nearly $1 billion in new postsecondary grants and approximately $500 million for elementary and secondary education initiatives.
Education Secretary Linda McMahon characterized the interagency arrangements as evidence that federal education programs can operate through other departments while states assume greater responsibility for education policy.
“This is truly proof of concept that our interagency partnerships are delivering for the American people by streamlining services, breaking up the federal education bureaucracy, better stewarding taxpayer resources,” McMahon said.
The department reported that nearly 80% of new elementary and secondary education grants went directly to state education agencies or projects endorsed by states.
The Office of Career, Technical, and Adult Education processed more than 7,850 payments totaling $2 billion through the Labor Department. The funding supported career and technical education, adult literacy and workforce preparation.
The Office of Postsecondary Education awarded approximately 1,000 new grants totaling nearly $1 billion through Labor and HHS, with priorities including registered apprenticeships, employment-focused training and responsible superintelligence.
Among the awards, $365 million went to the Strengthening Institutions Program, which supports colleges serving low-income students through improvements in academic programs, management and financial stability.
Another $44.5 million supported the Rural Postsecondary and Economic Development program, which connects higher education opportunities with workforce needs in rural communities.
The department also directed nearly $500 million through Labor and HHS for elementary and secondary education programs covering literacy, charter schools, civics instruction and academic assessments.
That funding included $78 million for charter school expansion and replication, $38 million for career exploration initiatives and $19.8 million for American history and civics education.
Federal special education funding remained another priority. The department reported awarding a record $144 million to states under the Individuals with Disabilities Education Act to support infants, toddlers, children and young people with disabilities.
Under a policy change, states may now use IDEA Part C early intervention funding to provide expectant parents of infants with disabilities with information and referrals before birth.
The department is also coordinating with HHS on services for families and children with disabilities.
The interagency approach extended to child care assistance for college students.
The Child Care Access Means Parents in School program received almost 300 applications after the Education Department used HHS relationships with child care providers and community organizations to expand outreach.
That compares with 161 applications in the program’s previous competition, representing an increase of roughly 86%.
The department also reported continued cooperation with the Treasury Department on federal student loan administration.
The agencies launched a Defaulted Loans Support Center to help borrowers navigate loan rehabilitation and consolidation as part of efforts to return defaulted borrowers to repayment.
The fiscal 2026 activities reflect the administration’s effort to reorganize federal education functions around existing agency infrastructure, workforce development, and state-directed funding while maintaining federal grant programs through interagency arrangements.
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