November 13, 2026
Written by Sasha Pudelski, Director, Advocacy at AASA, The School Superintendents Association and member of the AESA advocacy team
The balance of power in Washington has shifted. After two years of unified Republican control, the country is headed for divided government. When the 120th Congress is sworn in on January 3, 2027, Democrats will hold more than 250 of 435 House seats and at least 54 Senate seats, with Mississippi and Alaska still undecided.
Those are big Democratic majorities, but they aren’t veto-proof or filibuster-proof, and President Trump keeps his veto pen and his regulatory reach. Expect the new majority to put most of its energy into oversight of the Administration’s education agenda, and expect the Administration to lean even harder on wielding power in the regulatory and enforcement space.
Below are the three issues we believe matter most for school districts, both in the coming weeks and in the new Congress.
1. Funding
The first fight comes before the new Congress arrives. The current continuing resolution (CR) expires December 11, and the outgoing Republican Congress must decide what to do about FY2027 appropriations, which fund the 2027-28 school year. The options are:
- a full-year spending package
- another short-term CR that pushes the work into early next year
- a long-term CR that would likely hold funding at current levels
- a government shutdown, if no deal is reached
Having lost her re-election bid, Senate Appropriations Chair Susan Collins has strong incentive to finish a full-year spending package before she departs. Republicans may also see this as their last chance to fund their priorities while they still control the Senate. Other things stand in the way:
The two parties haven’t agreed on top-line numbers. President Trump has called for a $1.5 trillion increase in defense spending, and Democrats want parity for non-defense programs.
The Senate Appropriations Committee hasn’t released any FY2027 bills this cycle.
Some Democrats would rather wait until they hold the gavels. There are many disagreements on what policy riders to include in FY27. Most notably for K-12 leaders, there is a push to block the proposed OMB and EDGAR rules that would overhaul how federal grants are awarded and managed.
What it means for schools: Divided government makes deep cuts to Title I, Title II and Title III much harder to pass. It also means more brinkmanship and a real risk of shutdowns and late funding. Plan for uncertainty around federal funding timelines, and keep telling your members of Congress how federal dollars show up in your classrooms.
2. Vouchers: The Federal Scholarship Tax Credit
Implementation of the federal tax credit voucher program is underway. In October, Treasury and the IRS issued proposed regulations which take effect for 2027. Under the proposal, states get little authority to add program requirements or to decide which scholarship-granting organizations go on their approved lists, but they do have compliance and oversight responsibilities. In the interim, many states are awaiting Sec. 530 guidance which will determine which expenses FSTC scholarships can cover. Treasury has said guidance will be issued before the end of the year.
As of last week, 32 Governors told the IRS they intend to opt into the FSTC. At least five of them flipped from Republican to Democratic governors in this election: Iowa, Georgia, Ohio, Nevada and Texas (Alaska’s race may also have flipped, but is still too close to call). It’s unclear whether the incoming governors will want to opt out for 2027, or be able to, and the question could end up in court. Several other Democratic governors are weighing their options while they wait on Treasury guidance.
In Congress, efforts to pass the Keep Public Funds in Public Schools Act will grow, but without a veto-proof majority the credit is likely to stay in effect for the next two years.
What it means for schools: The most important decisions on this voucher program are now being made in your state capitol. If your state has opted in, or your new governor is reconsidering, make sure state leaders hear from superintendents about what’s at stake for public school students.
3. E-Rate
We are still awaiting the FCC’s final rules on its proposed overhaul of the E-Rate program. With a new majority in Congress, we expect Democrats to scrutinize the FCC’s efforts to undermine internet access for schools and libraries. If the final rule weakens the program, Democrats may try to overturn it with a Congressional Review Act (CRA) resolution of disapproval, which needs only a simple majority in each chamber and cannot be filibustered. However, the President can veto a CRA resolution, and overriding a veto requires two-thirds of both chambers, so success would depend on significant Republican support.
Congress may also need to act on a new Fifth Circuit ruling that targets the Universal Service Administrative Company (USAC), the organization that processes every E-Rate application and payment. The court held that the FCC never had the authority to create USAC, a flaw the agency can’t fix on its own. Until the courts or Congress step in, the funding districts count on for connectivity rests on shaky legal ground. A bipartisan congressional working group is reportedly close to draft legislation on universal service, which could provide the fix.
What it means for schools: E-Rate is facing pressure on two fronts: an FCC review that could reshape the program, and a court ruling that calls into question the organization that runs it. Nothing has changed for districts yet, so keep filing and following program deadlines as usual, but build some cushion into your connectivity budget in case funding commitments are delayed or reduced. Most importantly, tell your members of Congress what E-Rate makes possible in your district, because a congressional fix may be what keeps the program on solid ground.
Our Path Is Forward
AESA members span the political spectrum, and we’ve worked with every combination of political leadership in Washington. A divided government can create new openings for oversight and accountability, as well as new risks of gridlock and missed deadlines. Either way, AESA stands ready to help Congress and the Administration know better, so they can do better, for the students we serve.