WASHINGTON — The Education Department said Tuesday it will shift day-to-day management of more than $20 billion a year in K-12 grants to the Labor Department in a sweeping downsizing. The transfer is one of six interagency agreements announced by the administration as it pursues President Donald Trump’s goal of “returning education to the states,” Nov. 18, 2025.
In its statement announcing the partnerships, the Education Department said the deals with Labor, Interior, Health and Human Services and State are intended to streamline federal work while continuing programs Congress requires.
Education Department shift: what moves to Labor
The two largest agreements place the Education Department’s elementary and secondary education work — and much of its postsecondary grant administration — under Labor’s management. Labor will run grant competitions and provide technical assistance while Education Department officials retain oversight and policy responsibilities, according to a Labor Department news release. Labor Secretary Lori Chavez-DeRemer said the goal is to “prepare students for today and tomorrow’s workforce demands.”
Education Week reported the Labor deal would move most of the Education Department’s Office of Elementary and Secondary Education to Labor, including major formula grants such as Title I for low-income students. The outlet said other agreements would shift Indian education to Interior and move some student-support and international education programs to Health and Human Services and State.
Education Secretary Linda McMahon framed the changes as an efficiency move rather than a funding cut. “Cutting through layers of red tape in Washington is one essential piece of our final mission,” she said.
Education Department downsizing draws legal and logistical pushback
State and district leaders say the practical question is whether the new arrangement truly reduces paperwork for schools. “It is difficult to see how transferring cornerstone programs … will result in streamlined operations,” said David R. Schuler, executive director of AASA, the School Superintendents Association.
The Washington Post reported the Labor agreement would cover an Education Department office that administers 27 K-12 grant programs, while a separate deal would move an office overseeing 14 postsecondary programs. The paper said special education, civil rights enforcement and federal student aid would remain at the Education Department for now.
A December issue brief from the Bipartisan Policy Center warned the shift could bring new costs and confusion, including more points of contact for states and technical hurdles if Labor must adapt systems to handle Education Department-style formula grants.
The cross-agency approach also revives an old Washington debate about where federal education programs belong. In 2018, Reuters reported the Trump White House proposed merging the Education and Labor departments. And after Trump’s 2024 campaign renewed calls to eliminate the Education Department, ABC News reported congressional Republicans began introducing bills to dismantle the agency and redistribute its programs.
For now, the Education Department says schools and states should continue to see federal dollars flow, but the interagency shifts are likely to face congressional scrutiny and court challenges as the new management structure takes hold.
