Arizona Schools Face Tough Choice: Embrace DEI or Risk Federal Funding Loss

Public schools in Arizona are facing significant financial jeopardy due to noncompliance with new federal regulations. The Arizona Department of Education is proactively investigating adherence to these guidelines, particularly as the U.S. Department of Education retracts extensions for spending Covid relief funds.

State officials warn that failure to comply could result in the loss of approximately 7.6% of the state’s education funding, which amounts to around $767 million in grant awards for 2024. In light of recent directives concerning Covid deadlines, the focus on diversity, equity, and inclusion (DEI), and student privacy, State Superintendent Tom Horne asserts that withholding federal funds is within the department’s legal rights.

In a recent communication, U.S. Secretary of Education Linda McMahon addressed concerns regarding violations of student privacy laws. In a letter dated March 28, she warned that educational institutions might face repercussions for not fully disclosing information about students’ mental and physical health, specifically regarding issues of gender identity. Horne highlighted the seriousness of compliance with the Family Educational Rights and Privacy Act (FERPA) and the Protection of Pupil Rights Amendment (PPRA), reiterating the federal government’s stance on these matters.

Deadlines for compliance are approaching. The Arizona Department of Education requested documentation from schools before an April 30 deadline. So far, of the 658 total required responses, only 365 have been submitted.

Further complicating matters, schools received another reminder about compliance with Title VI related to DEI initiatives. On April 3, the U.S. Department of Education indicated that schools could lose funding if they incorporate DEI programs or consider race in admissions and hiring policies. A follow-up deadline of April 24 was imposed for schools to submit compliance attestations.

Among those facing potential funding cuts is the Kyrene School District, which was threatened with a $1.5 million loss due to an alleged DEI language in a preliminary policy. Erin Helm, the district’s communications director, contested the claim, clarifying that no formal notification had been received, and that the policy had not yet moved beyond preliminary approval.

Despite the backlash over Horne’s threat, he emphasized that all existing policies comply with state and federal regulations, including Title VI. As of now, only 324 attestation responses have been recorded, indicating that many districts remain unverified.

On a separate but related note, the Arizona attorney general is taking action regarding the federal Department of Education’s abrupt alterations to the timeline for spending ESSER funds. Originally set to be available until March 2026, the deadline was moved to March 28, 2025. This shift threatens funding for various educational initiatives.

Cedar Unified School District exemplifies the potential fallout, standing to lose about $1 million designated for rebuilding bathrooms and providing virtual tutoring. This interruption has already led to the loss of six staff members and the cancellation of beneficial tutoring programs.

Cedar Unified Superintendent Dean Slaga voiced concerns about the long-term implications of funding losses on staff and student support services. The strain on resources is expected to affect more than just Cedar Unified, with an estimated $3.6 million in potential losses across ten other local education agencies if the compliance timeline isn’t honored.

Horne remains steadfast in the department’s commitment to comply with federal mandates, stating that the distribution of both federal and state funds must adhere strictly to the law. He reaffirmed the department’s obligation to ensure that all public districts and charters use funding according to federal guidance.