What the Department of Education actually does

America’s least understood and most efficient cabinet agency, explained

Today’s guest post is from Ben Miller, who was most recently the principal deputy under secretary at the US Department of Education during the Biden-Harris Administration.

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Last week, the US Department of Education announced plans to nearly halve its workforce. In making the move, US Secretary of Education Linda McMahon cited goals of improving efficiency and redirecting resources to students, parents, and teachers.

But before this cut, the Department was arguably the most efficient government agency.

With 4,200 employees in 2024, the Department of Education was the smallest cabinet agency by roughly a factor of two. Yet its annual $79 billion appropriation was the fourth largest, trailing just the Departments of Defense, Health and Human Services, and Veterans Affairs. And that’s not including the $1.6 trillion federal student loan portfolio managed by the agency.

The Department of Education sends vast sums of money out the door to states, districts, schools, and institutions of higher education quite efficiently. For every dollar the Department gets from Congressional appropriations, it spends about 3.4 cents to make that money flow, enforce the law, and ensure someone picks up the phone when one of the tens of millions of student loan borrowers needs help.¹ Moreover, Congress appropriates the money for these salaries and expenses separately from the money used for grant programs — spending less money on personnel will not increase the dollars flowing outside the building.

For years, the Education Department has been a target for elimination, with arguments focused on “sending education back to the states.”

But the truth is, education is not and never was federalized. The Department of Education does not employ any teachers or run any schools. It’s statutorily prohibited from dictating what is taught in schools, how it’s taught, or when it’s taught.

Upset about whether kids are taught phonics, what they are reading, why there’s another random Thursday with no school, or how the founding fathers get treated in ninth grade history? Don’t look to the federal government. Even funding for the food in school cafeterias comes from a different federal agency.

Everything the Department of Education actually does falls into five categories:

• Making large foundational investments in schools serving low-income students and students with disabilities and enforcing associated requirements for states to educate the most disadvantaged children in society

• Running the student loan and grant programs that help about 10 million students a year and managing loan repayment for 40 million Americans

• Enforcing civil rights laws to ensure that students aren’t discriminated against because of their race, sex, or national origin

• Compiling data on education, tracking national educational progress, and funding research to figure out what works

• Administering a range of smaller grant programs for things like charter schools, programming for homeless and foster youth, college access, and institutional support for lower-resourced colleges.

Here’s a closer look at the department’s five core functions.

Large formula grant programs and requirements to serve the most disadvantaged children

The bulk of ED’s K-12 funding flows through two big formula grant programs: Title I grants, which help low-income students, and IDEA state grants, which are for students with disabilities.²

Title I grants are named after the relevant section of the Elementary and Secondary Education Act. Their $18.4 billion annual allocation is distributed to states using four different funding formulas that generally also dictate the amount of money that goes to individual districts and the schools within them. Nearly 95 percent of districts and just over 60 percent of public schools qualify for some amount of Title I funding, and these dollars help an estimated 26 million students each year. Depending on the percentage of low-income students at a school, this money can either go to help the school overall or provide targeted services to students who are the furthest behind academically.

Title I is in part a federal corrective to the inherently inequitable use of local property tax revenue to fund a significant portion of public school revenue. Relying on property taxes means wealthier districts that bring in larger amounts of revenue can spend more educating their students. Federal funds help the lowest-income districts and schools provide additional services that a wealthy school district might take for granted.

State grants under the Individuals with Disabilities Education Act, or IDEA, are a bit smaller than Title I at just over $14 billion a year in the main state grant program. The money funds the additional individualized services that students with disabilities need to succeed in school. There’s also another $960 million for preschool students with disabilities and the creation of early intervention programs to identify students with disabilities who have additional needs.

The importance of Title I and IDEA state grants is in part the money, though only about 10 percent of K-12 public school funding comes from the federal government. But these two funding streams come with requirements for states and districts that set minimum expectations for serving students.

For example, receiving IDEA funds requires states to provide a “free appropriate public education in the least restrictive environment.” Prior to the creation of these grants, it was both legal and common for states to decline to provide educational programs for students with disabilities, and even those students who were served may have been taught in segregated schools or classrooms, away from their peers who did not have disabilities. These grants—and the requirements associated with them—moved millions of students into mainstream academic settings and completely changed the way this group of students is educated.

Title I has similar requirements, though the stringency of some of its conditions has changed over time. These funds require states to set academic standards in key subjects like English and math and administer assessments to track student progress. In 2002, Congress further tightened the requirements on these funds when it passed No Child Left Behind, demanding that states hold schools accountable for showing progress toward having all students demonstrate proficiency on these assessments. This included looking at results for different groups, like lower-income students. The increased federal accountability demands highlighted the challenges of the decentralized education system, as many states responded by lowering their standards (that response later led to the push for the adoption of common higher standards across states).

Congress lessened the federal accountability requirements in 2015 with the passage of the Every Student Succeeds Act, giving states greater leeway on their performance goals and the steps they had to take with struggling schools. What’s followed has been a general decline in student achievement scores, as Matt noted earlier this year. But the overall Title I requirements protect against states dumbing down their standards too far, not striving to educate their students, or dropping assessments of student learning in certain grades. They also require states to give parents report cards on how their school, district, and state are faring.

At the Department, Title I and IDEA have associated staff that handle the rules and regulations that attach to receiving these funds. They can give schools advice and technical assistance and ensure that the states, districts, and schools are meeting the requirements that come with the funds.

Make college accessible for millions of Americans

The Department of Education’s largest function by dollars and staff is administering the federal grant and loan programs for college in the Office of Federal Student Aid (FSA). This is the office responsible for distributing $120 billion each year in grants and loans for college, which helps almost 10 million Americans annually. It also oversees the $1.6 trillion in outstanding federal student loans owed by just under 43 million borrowers.

These programs are massive.

The Pell Grant program spends almost as much as Title I and IDEA combined each year. The federal student loan portfolio is nearly the size of all outstanding auto loans and for many years was the second largest source of consumer credit after mortgages. These funds are also critical for colleges and universities, many of which would not be able to stay in business without this money.

In total, FSA receives just over $2 billion a year from Congress to administer the federal aid programs. Of that, around half is directed by law to the companies that hold contracts to service student loans.

To put that in perspective, Citigroup has about the same amount of total assets as the federal student loan portfolio and spent more than 10 times as much ($29.2 billion) on compensation and benefits in 2023. And while the Education Department is not engaging in complex mergers and acquisitions, the litany of ways to repay a student loan makes it a far more difficult product to service than basically any other type of consumer credit.

The 1,400 FSA employees (in 2024) performed a range of functions related to the aid programs. There are those who work on the Free Application for Federal Student Aid (FAFSA), the form students and families must complete to receive grants and loans. There are staff who manage student loan repayment. Others oversee colleges to make sure they are following accounting rules and not committing fraud. There are also groups that investigate and escalate problems that students have with their grants and loans, produce content to educate the public about the programs, and train colleges and financial aid offices on how to manage the aid programs.

The recent firings and voluntary resignation options will reportedly leave FSA with half its 2024 headcount. That’s simply not enough people to cover all the office’s activities well. For example, the cuts appear to have eliminated the group that oversees student loan servicer performance, including monitoring calls and requiring fixes when problems arise, such as incorrectly billing borrowers.

The cuts also significantly shrank the office that oversees college compliance with the aid programs. This includes a waste, fraud, and abuse prevention role to make sure institutions give the correct amount of money to eligible students. But it also involves processing routine requests from schools to do things like add new programs so they can get federal aid, approve the sales of private for-profit colleges to new owners, and release funds for colleges whose past challenges with the programs mean they only get paid through reimbursement.

Those functions all had significant backlogs before large numbers of the employees doing this work were fired. Schools often cannot survive lengthy delays in reimbursement.

How are they going to fare if that process now takes months?

Enforce civil rights laws

At around 550 people in 2024, the Office for Civil Rights is the second biggest office by headcount at the Department of Education. It enforces six different federal laws that prohibit discrimination in educational settings. This includes well-known laws, like Title IX of the Education Amendments of 1972, which prohibits discrimination on the basis of sex, and Title VI of the Civil Rights Act of 1964, which prohibits discrimination based upon race, color, and national origin. The office also enforces laws related to discrimination based upon disability status and age.

Civil rights enforcement happens in several different ways. The office issues regulations that set requirements for states, schools, districts, and others under these laws. It also issues guidance that can encourage or dissuade certain practices. And it investigates states, districts, colleges and schools, and others if they do not abide by requirements to protect students’ civil rights.

The current administration is using Title IX compliance to force schools, states, and athletic associations to prohibit trans students from joining athletic teams. It’s citing antisemitism for other efforts, including the high-profile cancellation of funding to Columbia University and subsequent demands for the school to make a number of changes to get the funding restored.

By contrast, in prior administrations, the office investigated and issued guidance related to how policies to seclude or restrain students with disabilities could violate their civil rights. The Biden Administration had the office address violations of rights for LGBTQ+ students, including by expanding protections for these students through a since struck down Title IX rule.

Investigations are often opened in response to complaints, which increased have significantly in recent years and now number around 20,000 annually.³ The most common type of complaint relates to sex discrimination, followed by disabilities. The office can investigate specific instances of bullying, such as a situation in which a Black child endured racial slurs and other offensive statements for months. It can also look at pervasive misconduct, like a school district that did not properly investigate and act upon a litany of complaints about harassment of Black, Asian, and Jewish students.

This function gives students and parents a redress when their civil rights are violated and the school, district, or state does nothing.

The office also administers the Civil Rights Data Collection, a national database that provides breakdowns of a lot of key K-12 educational indicators. These data are how the public is able to see issues like disparities in the rates of school suspension by race.

Layoffs affected more than 240 staff in this office, including the closing of several offices located outside of Washington, D.C.

Education research and statistics

The Institute of Education Sciences (IES) is an independent office that collects key statistical information on education and also funds basic research. It receives about $807 million a year.

Essentially any meaningful number on national educational performance comes out of IES, including through its statistical arm, the National Center for Education Statistics (NCES). For example, the doom and gloom statistics used to justify proposals to eliminate the Department come from the National Assessment of Educational Progress, or NAEP, which is also referred to as “the nation’s report card.” This annual assessment creates valid and reliable benchmarks to track how students are doing in states and in certain major school districts. NCES also administers international assessments used to judge how American students and adults compare to those in other countries.

NCES also produces useful annual indicators across early childhood through postsecondary education, including administering big data collections for K-12 schools and postsecondary institutions. It runs large, complex longitudinal studies, like following students from their first year in college onward or kindergarteners through to third grade. These studies form the backbone of our understanding of how the education system fares nationally. The work also supports states in improving their own data by funding longitudinal data systems.

Beyond statistics, IES also funds a lot of research into education, including rigorous reviews to determine if different educational interventions are effective.

For example, it’s currently supporting research into how borrowers on certain student loan repayment plans fare and how states are doing in helping the K-12 schools identified for the greatest assistance. In the past, it supported research into how parent messaging affects absenteeism, advising in college access programs, and quality improvement in after school programs, to name a few. It administers a “what works clearinghouse” to help increase the adoption of evidence-based policy. And until earlier this year, it managed 10 regional education laboratories that help states and districts consider evidence and evaluation in their own work.

The Trump administration’s cuts apparently eliminated 90 percent of IES staff, leaving approximately 20 total employees, including just three to do all the work of NCES. The Administration also previously cancelled significant numbers of existing IES grants.

Specialized smaller grant programs

The remainder of the Department’s programmatic work involves administering grants focused on particular issues or areas. These are all programs created by Congress, which also determines annual funding allocations. Because they generally tackle specific problems, the grants vary significantly in size and whether they’re awarded using a formula or a competition that requires applications.

On the K-12 front, these grants include funds for improving teaching training and professional development, creating high-quality state tests, and supporting well-rounded education. There is also funding for specific populations of students. This includes the Impact Aid program, which supports students who live on or near military bases or other federal lands, and separate grants for homeless, rural, migrant, at-risk and Native American students. There are also grants for charter schools, magnet schools, and specific educational topics like the arts, gifted and talented education, civics, and American history.

In higher education, the Department runs some formula programs, such as the $476 million for Historically Black Colleges and Universities, and the $80 million for Tribally controlled colleges and universities. It also awards more than $1 billion in competitive grant programs focused on college access programs or supporting under-resourced colleges of different types.

Straddling K-12 and postsecondary education is $1.4 billion in career and technical education funding, which goes out to states by a formula.

Finally, the Department administers some programs directly targeted at adult learners. This includes almost $4 billion for states to help adults with disabilities obtain jobs and $715 million for adult education to individuals who do not have a high school diploma.

Conclusion

Those clamoring to shutter the Department of Education have always played coy with exactly what they mean.

Sometimes, they’ve meant taking the same functions and moving them elsewhere, like having the US Department of the Treasury take over the federal student loan portfolio. That proposal raises a lot of questions, such as would Treasury actually want to absorb such a massive and complicated portfolio? Would everything done in Federal Student Aid be moved or only pieces? And would the part of the Department of Education that writes rules governing the aid programs now be binding a different federal agency?

But where shuttering proponents are often silent is on the importance of the requirements and standards the Department of Education attaches to the money it awards.

The Department’s signature programs establish a national goal: that regardless of who you are or where you come from, our nation’s public schools will serve you and educate you to a standard of excellence. Aspirations like this have driven our country’s prosperity for decades and have allowed millions of people with disabilities to live as full and productive members of a society that in the not too distant past shunned them.

The Department of Education doesn’t tell states, districts, schools, colleges, or any other institutions how they have to educate anyone. But it has always insisted that they try.

1. Around 35 percent of the salaries and expenses money goes directly to paying student loan servicers, so the spending rate on Department of Education staff is even lower.

2. Though not directly part of Title I, there are also large formula grants that provide several billion dollars of additional assistance related to improving teaching training and professional development, creating high-quality state tests, and to support well-rounded education.

3. Much of this growth is organic, though at least some is coming from one person filing thousands of complaints.