Congress is again on the brink of a partial government shutdown, driven by disagreements over policy reforms for the Department of Homeland Security’s ICE operations. While education funding is not the source of the conflict, the consequences could still ripple across the U.S. Department of Education at a moment when federal and state voucher policies are expanding and placing additional pressure on public schools.
Government Shutdown Risks for Education
Last week, the House passed a bipartisan package of six appropriations bills to fund the federal government for Fiscal Year 2026, including the Department of Education. Because the bills were bundled and sent to the Senate as a single package, it is procedurally difficult to separate individual agencies for further negotiation and meet the January 30 deadline, limiting the Senate’s ability to move some funding bills forward while continuing talks on others.
Overnight, Senate leaders reached a bipartisan agreement to remove DHS funding from the package and instead advance a short-term continuing resolution to maintain current funding levels for two weeks while negotiations continue. This proposal must still pass the Senate and return to the House when members are back in session next week. As a result, a brief shutdown is likely given today’s deadline, though major disruptions to education funding are unlikely.
While short shutdowns typically do not interrupt most formula funding, programs such as Impact Aid and Head Start—both reliant on monthly installments—could be affected. A longer shutdown could also delay federal administrative work needed to distribute funds to states, creating uncertainty for districts as they plan for the upcoming school year.
Federal and State Voucher Expansion
At the federal level, the administration has released new details on a federal voucher program. Part of the Big Beautiful Bill, this program will operate as a federal tax credit to support private and religious schools tuition and potentially some public school costs such as tutoring. North Carolina is not currently opted in; Governor Stein previously vetoed legislation to do so, citing the need for clearer guidance and stronger protections for public school students, and has indicated he would reconsider if public school students are ensured meaningful benefits. Uncapped federal vouchers could divert significant resources from public schools, particularly in rural and low-wealth communities that rely heavily on federal support. Enrollment declines tied to voucher expansion may further reduce funding for schools serving the highest-need students.
Meanwhile, state spending on school vouchers via North Carolina’s Opportunity Scholarship program has grown dramatically since the NC General Assembly expanded eligibility for the program to families of all income levels, with more than 100,000 students receiving vouchers this school year. In 2025-26, the state appropriated over $600M to the program with plans to appropriate $855M annually by 2032. This expansion comes as North Carolina ranks last nationally in funding effort and second to last in per-pupil spending for public schools. Reports continue to raise concerns about transparency, accountability, and the use of public funds to subsidize private education for higher-income families.
Taken together, ongoing federal funding uncertainty, inadequate funding for public schools, and rapid voucher expansion pose real implications for North Carolina’s public schools, students, and workforce pipeline. Policymakers face critical decisions about stability, equity, and North Carolina’s long-term ability to fully fund and support its public schools and students.
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