South Dakota gets federal OK to pool some education funds, ease Title I carryover

South Dakota has won federal approval for two education-funding waivers that could matter quickly for district budgets: a Returning Education to the States waiver that lets the state consolidate more than $19 million in selected state-level federal funds through 2029, and Ed-Flex authority that lets the state approve certain district waivers itself, including broader relief from Title I carryover limits. The U.S. Department of Education announced both approvals on July 24, 2026, just as districts are locking in 2026-27 staffing and spending plans. (ed.gov)

What changed is narrower than the rhetoric around “returning education to the states” may suggest. The consolidation waiver applies only to funds South Dakota reserves at the state level, not to the full stream of formula dollars districts receive directly. And Ed-Flex does not erase federal requirements wholesale; it gives the South Dakota Department of Education authority to grant certain waivers to districts and schools without first getting Washington’s sign-off, while leaving core guardrails such as civil-rights, health-and-safety, IDEA, and parental-participation requirements in place. (ed.gov)

For superintendents and federal-programs staff, the immediate question is practical: does this mean districts can now keep more unused Title I money from one year to the next? The answer is sometimes, and with state approval. South Dakota officials said the new Ed-Flex authority lets the state waive the annual Title I carryover limit for districts more broadly than before. Under federal law, a district with a Title I, Part A allocation of at least $50,000 generally may not carry over more than 15 percent of that allocation into the next fiscal year unless it gets a waiver; absent special relief, states can approve that waiver only once every three years. (news.sd.gov)

What this changes for district Title I budgets

That matters most for districts large enough to be subject to the 15 percent cap in the first place. South Dakota said in its public notice that moving to annual carryover waivers would affect mainly the state’s larger districts, because smaller and mid-size systems are often already outside that threshold. In plain terms, the waiver is less about sending districts new Title I money than about giving some of them more time to spend money they already have without rushing purchases or staffing decisions before a deadline. (doe.sd.gov)

That could be useful in a year when districts are still trying to line up intervention staff, tutoring contracts, or multiyear literacy work after budgets are adopted. A carryover waiver can help a district avoid the familiar “use it fast” scramble that sometimes distorts spending late in the year. But the trade-off is obvious too: money carried over is money not yet supporting students, so the real test will be whether South Dakota uses the authority to improve planning rather than simply normalize delay. The federal Ed-Flex framework requires the state to decide that a waiver will still meet the purposes of the underlying program and to report annually on the waivers it grants. (ed.gov)

Another important nuance: South Dakota’s federal approval does not mean every district automatically gets unlimited carryover. Ed-Flex gives the state authority to approve waivers for local districts and schools; it does not itself waive all district requirements in one stroke. District leaders will still need clear state guidance on who may apply, what documentation will be required, and whether the department will approve waivers routinely or case by case. The state’s July 24 announcement emphasized the Title I carryover issue, but the public draft application posted earlier this month also discussed Title IV-A spending-flexibility waivers, suggesting the department may use the new authority in more than one area. (ed.gov)

What South Dakota can now consolidate at the state level

The separate Returning Education to the States waiver is about state-held set-asides, not district carryover. In its July 24 approval letter, the Education Department said South Dakota may consolidate state-level activity funds from five programs: Title I, Part B for state assessments; Title II, Part A for supporting effective instruction; Title III, Part A for English language acquisition; Title IV, Part A for student support and academic enrichment; and Title IV, Part B for 21st Century Community Learning Centers. The department said the waiver covers funds awarded from federal fiscal years 2026 through 2029 and allows South Dakota to use those pooled dollars for any allowable use within the included programs. (ed.gov)

That is real flexibility. It means the state can, in theory, knit together teacher training, assessment work, English-learner supports, enrichment, and some after-school-related state functions around a smaller set of priorities instead of keeping each pot in its own lane. South Dakota has already signaled where it wants to aim: its July 24 release pointed to literacy work rooted in the Science of Reading and to math-improvement efforts tied to the state’s revised standards. The state’s literacy and math pages show those initiatives are already central to its improvement agenda. (news.sd.gov)

But the approval letter also sets limits that matter. South Dakota must keep administrative funds separate from state-level activity funds, continue to meet the programmatic responsibilities attached to each covered program, and submit annual reports by Oct. 30 describing how the waiver is being used. In other words, the state has more room to move money across priorities, but it has not been excused from serving English learners, maintaining assessment duties, or carrying out other statutory obligations attached to those programs. (ed.gov)

For educators, the policy question is whether that flexibility becomes visible in schools. If the state uses consolidated funds to reduce duplicated professional development, align literacy and math supports, or simplify grant management, district leaders may feel the change as less paperwork and more coherent support. If, instead, consolidation mainly recenters decision-making in Pierre without a transparent spending plan, school systems may hear a lot about flexibility while seeing little difference beyond new state priorities. The July 24 federal approval and state release authorize the move, but neither document lays out a line-by-line public spending plan for the more than $19 million. (ed.gov)

More authority, but also more pressure to explain choices

The federal department said South Dakota is the sixth state to receive a Returning Education to the States waiver and the 22nd Ed-Flex state. South Dakota’s Ed-Flex authority runs through the 2030-31 school year, assuming it continues to meet federal requirements. That makes this more than a one-year experiment; it creates a multiyear opening for the state to reshape how some federal dollars are managed and how often districts seek relief from spending rules. (ed.gov)

The next thing worth watching is not another press release but implementation. District finance officers will need prompt guidance on Title I carryover requests before closeout deadlines and 2026-27 amendment cycles. Program leaders will want to know whether Title IV-A waivers are actually on the table. And superintendents, especially in districts that rely heavily on Title I, will need to see whether the new flexibility produces something tangible: steadier multiyear planning, or simply a looser set of rules with the same old uncertainty attached. (news.sd.gov)