Education Department Unveils $12 Billion Spending Cuts in 2026 Budget Proposal

The plan includes lowering the maximum Pell Grant and defunding several college access programs totaling more than $2 billion.

The headquarters of the Department of Education in Washington on March 12, 2025. Win McNamee/Getty Images

The U.S. Department of Education has revealed full details of its proposed fiscal year 2026 budget, which calls for significant spending cuts and the elimination of several grant programs totaling billions of dollars.

Published on May 30, the comprehensive proposal expands on the “skinny budget” released earlier that month. That shorter document already reflects President Donald Trump’s priorities: steep cuts to federal staffing and funding and changes aimed at returning education authority to the states as the department itself moves toward dissolution.

Under the latest proposal, the department’s overall budget would fall to $66.7 billion, a reduction of $12 billion, or 15.3 percent, from fiscal year 2025 levels.

One of the most significant changes is a reduction in the maximum Pell Grant award, a need-based grant that helps low- and middle-income students afford college. For the 2026–2027 academic year, the administration proposes cutting the maximum award from $7,395 to $5,710, roughly the same level as when Trump first took office in 2016.

While the proposed budget maintains overall Pell Grant funding at current levels, officials say the reduced award is necessary to address a projected $2.7 billion funding shortfall. They also point to an analysis that found that nearly $90 million in student aid had been awarded to ineligible recipients, including more than $30 million in aid for thousands of deceased individuals over the past three years.

“This chronic mismanagement jeopardizes access to postsecondary education for students and families across the country,” the budget document states.

“The President is committed to fulfilling his promise to preserve the Pell Grant program; however, the growing funding shortfall created by past congressional decisions makes it necessary to decrease the maximum award. The administration looks forward to working with Congress to develop a long-term, sustainable solution.”

In addition to the Pell Grant cuts, the administration seeks a $980 million reduction to the Federal Work-Study program. The proposal includes a new formula for a “more appropriate split between Federal and employer wage subsidy,” such that employers would pay 75 percent of a student’s hourly wage, up from 25 percent, while the federal government covers the remaining 25 percent.

Also on the chopping block are TRIO and Gear Up, two federal programs aimed at incentivizing colleges and universities to admit disadvantaged and low-income students. Trump officials previously called them “relics of the past,” arguing that schools today should use their own resources, not taxpayer dollars, to recruit those students and support them through graduation.

Defunding TRIO and other grant programs would save more than $2.13 billion, according to the latest proposal. These programs are described as duplicative, outside the department’s mission, lacking proven effectiveness, or better funded through state, local, or private sources.

“Overall, this Request reflects the Department’s commitment to returning education to the States, balancing the provision of support with the responsibility of each student to choose their own path and work toward a postsecondary credential, and restoring the rightful role and responsibility of State oversight in and support of higher education,” the document states.

On the K–12 side, the latest proposal maintains funding for two of the department’s largest programs: $18.4 billion for Title I-A grants supporting low-income students, and $14.9 billion for IDEA Part B grants for students with disabilities.

At the same time, it would consolidate 18 existing K–12 grant programs—currently totaling $6.5 billion—into a single, $2 billion “Simplified Education Fund,” and states would have broad discretion over how to use it. This represents an almost 70 percent funding reduction for those programs.

Education Secretary Linda McMahon, who is tasked with navigating her department through its planned closure, defended the cuts during a hearing in early May before the House Appropriations Subcommittee on Education.

“We seek to shrink federal bureaucracy, save taxpayer money, and empower states that best know their local needs to manage education in this country,” McMahon told lawmakers.