Why It Matters

Impact Aid's largest payment category, Section 7003(b) Basic Support Payments, is the only federal elementary and secondary education program receiving at least $1 billion annually funded solely through budget-year appropriations. That means school districts cannot count on the money until after their school year has already begun, according to a new Congressional Research Service (CRS) report. ​

For fiscal 2026, Section 7003(b) received $1.477 billion, representing 90.6% of the $1.630 billion total Impact Aid appropriation. Fewer than 10% of the more than 17,000 local educational agencies (LEAs) nationwide, including 932 in fiscal 2025, qualify for these payments.

The Big Picture

Authority to fund Impact Aid through advance appropriations or forward funding has existed since 1968 under Title IV, Section 420 of the General Education Provisions Act, yet no such appropriations are currently provided with that timing. The fiscal 2013 sequester cut Impact Aid immediately in the 2012–2013 school year, while forward-funded programs were not affected until 2013–2014.

The report evaluates three transition options at current funding levels:

  • Forward funding only: Would require $2.954 billion in fiscal 2027, double the current annual level of $1.477 billion.
  • Advance appropriations only: Would require $1.477 billion in fiscal 2027 plus a separate $1.477 billion advance for fiscal 2028, equal in total cost to the forward-funding option but spread across two years.
  • Combined approach (25% forward, 75% advance): Would require $1.846 billion in fiscal 2027 plus $1.108 billion advanced for fiscal 2028.

Each transition may require offsets or a provision excluding the transition amount from budget enforcement; the Elementary and Secondary Education Act would not need amendment, because both mechanisms are already authorized for the Impact Aid account.

The Consolidated Appropriations Act, 2026 (P.L. 119-75) included a provision requiring the Secretary of Education to award formula grant funding for specified programs on the date funds become available, but the report does not identify Section 7003(b) among the covered programs.

The Bottom Line

The government is operating under the Continuing Appropriations and Extensions Act, 2027 (P.L. 119-103), enacted Sept. 2, which funds federal operations only through Dec. 11. Full-year fiscal 2027 appropriations have not been enacted, leaving the timing alternatives the report describes as prospective options. During a continuing resolution, LEAs can request early payments, but these are partial Basic Support Payments.

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