July 2025 Federal Policy Developments: What You Need to Know
Learn how recent federal budget decisions—including deep budget cuts and delayed education funding—are impacting children and youth experiencing homelessness, and learn how you can take action to support them.
The week of June 30th brought several far-reaching federal policy developments. We’ve summarized them briefly below.
- HR 1, the 2025 reconciliation bill, the budget “mega-bill”
- ED Withholds Congressionally Approved Funding for Important Federal Programs
- Congress Begins Work on FY2026 Funding
While these events are deeply troubling, it’s more important than ever to stay grounded in our collective mission: ensuring that children and youth experiencing homelessness have all the support they need to thrive. Our daily actions – small and large – do make a difference. We are reminded of the strength and resilience of our students and families, who persevere against the odds. Like them, we must choose to believe that we will find a way to come out stronger.
1. HR 1, the 2025 reconciliation bill, the budget “mega-bill”
Congress has passed the sweeping budget bill, H.R. 1, sending it to President Trump for signature. The legislation makes deep, long-term cuts to food assistance, health care, and higher education—slashing essential supports for low-income families and students—to fund increased defense spending, extend tax breaks, and raise the debt ceiling by $5 trillion. The bill spans more than 1,000 pages, but for millions of children and youth across the country, its impact can be summed up in just three words: sicker, hungrier, poorer. In the coming weeks, SchoolHouse Connection will release a summary of the provisions most directly affecting children and youth experiencing homelessness or at risk of homelessness.
PLEASE NOTE: HR 1 is not the bill that addresses McKinney-Vento Education for Homeless Children and Youth (EHCY) funding, or other discretionary annual funding. EHCY funding is still in place. It is determined through a different process with key dates coming later in July (see below).
2. ED Withholds Congressionally Approved Funding for Important Federal Programs
The U.S. Department of Education (ED) announced that it was withholding FY2025 Congressionally-approved funding for a number of important federal education programs, including:
- Title I-C for migrant education ($375 million)
- Title II-A for professional development ($2.2 billion)
- Title III-A for English-learner services ($890 million)
- Title IV-A for academic enrichment ($1.3 billion)
- Title IV-B for before- and after-school programs ($1.4 billion)
- Adult basic and literacy education ($729 million)
Funding for these federal programs was supposed to be sent to state educational agencies on July 1st, in advance of the new school year.
The Trump Administration said that it is “still reviewing” FY2025 funding for these programs, and has not yet made final decisions.
However, education agencies depend on these funds for staffing, materials, and student services for the school year that starts this week.
While SHC is extremely relieved that FY2025 Education for Homeless Children and Youth (EHCY) funding was released to states on July 1 (see final state EHCY allocations here), we urge the Administration to immediately release all education funds as directed by Congress. Schools and communities are working hard to support students in complex situations. They need the resources Congress has provided – on time and in full – to do so effectively.
Funding Delays Are Hurting Students—Act Now
We encourage readers to contact their Members of Congress to urge them to press the White House to release these funds immediately.
- This action alert from the AfterSchool Alliance can be modified to include information on any or all of the funds that are being held.
- Read more about state-by-state K12 funding impacts here.
3. Congress Begins Work on FY2026 Funding
Congress is moving ahead with the FY2026 appropriations process, which determines annual funding for federal programs for education, early care, housing, and homeless assistance. Unlike the budget ‘mega-bill’ that passed this week, the annual appropriations process requires 60 votes in the U.S. Senate, which means Democratic votes will be needed.
The U.S. House of Representatives subcommittee with jurisdiction over education, health, and human services programs is scheduled to meet the first week of September to begin crafting its version of FY2026 appropriations.
SHC urges readers to take action to preserve EHCY funding, which provides basic access to education for over 1.5 million homeless students.
Your advocacy has made a difference so far. And remember: SHC can help schedule, prepare, and even facilitate a virtual meeting with your Congressional offices if you wish. Please contact TJ Lucas, Senior Manager for Federal Policy, if you are interested.