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As states and districts seek new ways to align funding with strategic priorities, federal funding flexibility has become a growing topic of conversation. Yet many education leaders are not be taking full advantage of the flexibilities that already exist within the Elementary and Secondary Education Act (ESEA).
The Strategic Funding and Finance Center recently spoke with Lindsay Fryer, a federal education policy expert who was involved in negotiating the most recent ESEA reauthorization, about the flexibilities available under current law, common opportunities that states may be overlooking, and key considerations for leaders exploring waivers or other innovative approaches.
Q: For readers who may not follow federal education policy closely, what does “flexibility” mean under ESEA?
Fryer: When people talk about flexibility, they're often referring to different things. First, there are the flexibilities already built into federal law. ESEA includes authorities that allow states and districts to transfer funds between programs, consolidate administrative funds, operate Title I schoolwide programs under certain conditions, and take other actions that support local priorities. In many cases, the flexibility already exists in law, but states and districts are not fully aware of the opportunities available to them.
Second, there is the ESEA waiver process. States may request waivers from the U.S. Department of Education to bypass certain statutory requirements when doing so supports a broader state strategy. Finally, there is Ed-Flex, which allows approved states to waive certain requirements on behalf of districts to support innovation and local decisionmaking.
The important point: Flexibility is not limited to waivers. A lot of it is already built into the law itself.
Q: Which existing flexibilities do you think are most underused?
Fryer: A few important flexibility tools stand out to me:
- Funding Transferability: States and districts can transfer 100 percent of Title II (teacher quality) and Title IV (student supports) funds into other programs, such as Titles I (low-income students) or III (English learners), to support more coherent strategies around priorities like literacy, math achievement, dual enrollment, rural initiatives, educator development, or student supports. Yet many leaders don't take full advantage of this authority.
- Title I School Improvement Funds: States have considerable flexibility in how they design and distribute Title I school improvement resources to support schools identified for improvement. If a state has a priority such as literacy improvement, it can incentivize and even require districts receiving school improvement funds to align those investments with the highest-quality evidence-based literacy practices and professional learning strategies.
- Direct Student Services: A state can reserve up to 3 percent of its Title I allocation to help districts provide services directly to students, such as advanced coursework, credit recovery, transportation, or academic acceleration. As personalized learning becomes a greater focus, this flexibility has significant potential.
- School Leader Reservation: Title II allows states to reserve up to 3 percent of a state allocation specifically for principals and school leaders— a lever that's critical to know about since school leadership drives so much of school culture, educator retention, and student outcomes.
SFF: How should state leaders decide whether to use existing flexibilities or pursue a formal waiver?
Fryer: The starting point should always be answering the question about what problem you're trying to solve, not the waiver itself. Flexibility is not a goal. It's a tool.
I encourage leaders to ask a series of questions: What challenge are we trying to address? Do existing authorities already allow us to do something differently? If not, what specific federal requirement is creating a barrier? And finally, how will additional flexibility improve student outcomes or service delivery?
Many states that go through this strategic alignment process discover they have more flexibility than they initially realized. Waivers only become appropriate when there is a clear federal barrier preventing a state from implementing a well-defined strategy. Even then, the rationale should be tied directly to improving outcomes for students. That is what the U.S. Department of Education is looking for when considering waiver requests.
Q: What role does stakeholder engagement play in successful flexibility efforts?
Fryer: Stakeholder engagement is essential from both a practical and legal standpoint. States cannot submit waiver requests or Ed-Flex applications without providing opportunities for public comment. But meaningful engagement should begin long before that stage.
District leaders, educators, families, and community stakeholders often have valuable perspectives about what's working (or not) in schools, what's creating barriers, and where flexibility could make the greatest difference. Involving those groups early helps states identify priorities, design stronger proposals, and build support for implementation. Ultimately, districts and schools are responsible for putting any changes into practice. If they are not part of the conversation from the beginning, it becomes much more difficult to create sustainable change.
Q: How can states reduce administrative burden while maintaining accountability?
Fryer: Many recent flexibility proposals have focused on reducing administrative burden by consolidating dedicated funding streams and streamlining reporting requirements. The goal is not to eliminate accountability, but to shift attention toward outcomes rather than compliance for compliance's sake.
That said, transparency remains critically important. Flexibility should not diminish visibility into how students are being served or whether investments are making a difference. States still need to demonstrate that resources are reaching intended student populations and that outcomes are improving.
I often think about the distinction between accountability and accounting. Good accountability focuses on whether resources reached students and improved results. Excessive accounting focuses on tracking every individual dollar as a compliance exercise. Successful flexibility efforts will find the right balance between the two.
Q: How can leaders ensure flexibility supports historically underserved students?
Fryer: The purpose of ESEA has always been to improve opportunities for students who have been historically underserved, particularly students from low-income families. Any flexibility effort should remain grounded in that mission.
Even when funding streams are consolidated or reporting systems are simplified, states should continue examining access, participation, implementation, and outcomes across student groups. Flexibility may change how services are delivered, but it should not change who those services are intended to support.
Data collection and analysis plays a critical role here. Evaluation plans should be developed at the beginning of an initiative, not after implementation has already begun. To be most impactful, evaluation can't be an afterthought. From the outset of any flexibility effort, states need to articulate goals around what success looks like, how they will measure it, and whether students with the greatest needs will benefit from any changes being made.
Q: What should state and local leaders be watching in the coming months?
Fryer: I expect states to continue exploring both waivers and Ed-Flex authority, particularly as they seek to align funding around priorities such as literacy, workforce readiness, and broader measures of student success. We're already seeing states become more creative in how they think about flexibility and accountability.
At the same time, I think leaders should look beyond federal requirements when examining barriers to improvement. In some cases, the biggest challenges are not federal at all. States often discover their own internal approval processes, procurement practices, monitoring requirements, or other state-created systems create more obstacles than federal rules do. Taking a comprehensive look at those systems can reveal opportunities for improvement that don't require additional federal action.
For district business officers, this is also an opportunity to think more holistically about how federal, state, and local funding streams can work together to support student outcomes. Moving from a compliance mindset to a strategy mindset may be one of the most important shifts flexibility can enable.
Editor's Note: The Strategic Funding and Finance Center provides resources and technical assistance to help state and local leaders understand federal funding flexibilities, align resources to strategic priorities, and evaluate whether investments are improving outcomes for students.
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