Indiana Seeks Federal Waiver to Simplify Education Funding and Align Accountability

Indiana's Push for Educational Flexibility

Indiana is seeking federal approval to overhaul how it manages and tracks billions in education aid. The state’s request aims to align its accountability system with federal law while granting more autonomy in how schools utilize their funds. This initiative, submitted to U.S. Education Secretary Linda McMahon, involves a waiver from several provisions of the Elementary and Secondary Education Act (ESEA), the federal law that governs K-12 education.

If approved, these changes would take effect starting in the 2026–27 school year. State education leaders have framed this proposal as a move to "prioritize student learning over federal bureaucracy." Indiana Secretary of Education Katie Jenner emphasized the importance of this moment, stating that the state is ready to seize the opportunity to remove federal barriers and focus on improving student outcomes.

Governor Mike Braun also supported the move, highlighting Indiana’s leadership in education and innovation. He noted that returning education to the states allows for better support of Hoosier students, empowering parents with quality educational options and reducing red tape for educators.

Streamlining Federal Programs into One 'Block Grant'

The 19-page waiver application outlines a plan to simplify how federal dollars are administered and align Indiana’s accountability system with federal requirements. The proposal centers on four key areas: streamlining federal funding, easing local compliance, creating an innovation fund, and unifying accountability metrics.

The Indiana Department of Education (IDOE) has requested to combine funding from over 15 federal education programs—such as Titles I, II, III, and IV—into a single "strategic block grant." These programs provide critical support for low-income students, teacher training, English language learners, and technology access. Managing them separately is seen as time-consuming and resource-intensive.

According to the waiver, IDOE currently spends about $2.2 million annually on administrative infrastructure for ESEA compliance, with 75% of that amount dedicated to compliance and reporting rather than initiatives that directly benefit students. Consolidating these programs would allow the state to redirect resources toward priorities like early literacy, STEM education, and high school redesign.

The filing also references the efficient use of federal COVID-era ESSER relief funds, which were managed as a block grant model. This approach allowed the department to act quickly and align resources with urgent educational needs.

Rethinking School Improvement Funds

A major component of the request is the creation of a new "Education Innovation Grant" to replace the current federal School Improvement Grant structure. State officials argue that this change is necessary to address long-term underperformance in some schools. They cited data showing that despite years of federal investment, many schools identified for improvement remain among the lowest-performing.

The proposed approach would allow Indiana to direct about $25 million in annual federal school improvement funds to any district or program that serves students in persistently underperforming schools. This could include charter schools, microschools, or partnerships with industry or higher education institutions.

Hoosier officials believe this shift promotes "student-centered solutions" and reduces the stigma associated with receiving federal school improvement dollars. The waiver also proposes aligning Indiana’s upcoming A–F accountability system with federal reporting requirements, ending the confusion caused by dual performance ratings.

Teachers' Union Concerns

While the proposal has received support from state officials, the Indiana State Teachers Association (ISTA) has urged caution. The union expressed concerns that consolidating federal programs could weaken oversight and divert resources away from schools that need them most.

In a statement, ISTA leadership supported efforts to reduce administrative burdens but warned that consolidating programs might undermine educational equity. They raised concerns about shifting school-improvement funds to entities such as microschools or charter schools, which may not serve the most vulnerable students.

Despite these concerns, IDOE senior official Ron Sandlin described the proposal as a continuation of Indiana’s commitment to innovation. He emphasized that the flexibility waiver is not about reducing accountability but about aligning systems to focus more on serving students.

Under federal law, the U.S. Department of Education has 120 days to review Indiana’s submission and provide a response. If approved, the changes would take effect beginning with the 2026–27 school year. Jenner concluded her letter by emphasizing the importance of returning education to the states, allowing local leaders to make informed decisions about what students need most.