South Dakota Consolidates Federal Education Funds Under New Waiver

The U.S. Department of Education has granted South Dakota a 'Returning Education to the States' (RES) waiver, making it the sixth state to receive such flexibility. The move consolidates more than $19 million in federal education dollars through 2029—allowing the South Dakota Department of Education (SDDOE) to pool funds from Title I, Title III, and 21st Century Community Learning Center programs and redirect them toward state-defined priorities.

The waiver is paired with Ed-Flex approval, which lets the state waive certain federal requirements for local school districts without prior federal sign-off. South Dakota is now the 22nd state with Ed-Flex authority, the highest count in the Department’s history. Combined with the other five RES states, over $109 million in federal funding can now be aligned with locally crafted improvement plans.

According to SDDOE, the new flexibility will shift focus from tracking administrative time across separate programs to the quality of improvement activities themselves. The state intends to concentrate resources on literacy, family engagement, and mathematics instruction—areas identified as critical to raising student achievement.

What the Waiver Signals for State-Led Education Reform

From Compliance to Strategic Execution

For South Dakota, the waiver fundamentally changes how federal education funds are managed. Instead of siloed grant administration, state-level officials can blend resources behind a single strategic plan. That reduces bureaucratic overhead and gives districts more freedom to tailor interventions. The trade-off is that the state now carries the burden of demonstrating improved student outcomes without the guardrails of program-specific compliance checklists.

A Growing Shift Toward State Control

This approval is the latest in a series of steps by the Trump administration to devolve authority over federal education spending. Executive Order 14242, signed in March 2025, directed the Department to expand state and local control. The RES waiver is a direct policy lever to do that. With six states now operating under the model, the total addressable pool of flexibly deployed federal funds has crossed $100 million. While South Dakota’s $19 million is modest in absolute terms, the cumulative signal is that the administration is actively inviting other states to follow.

By granting Ed-Flex authority concurrently, the Department also reduces the friction for local agencies. Historically, a district wanting to bypass a federal requirement had to seek permission from Washington; now the state can approve it directly—further compressing the distance between decision-making and the classroom.

Balancing Accountability and Autonomy

The watchword is outcomes. Waiver guidelines still require states to explain how the removed requirements would have hindered student improvement and how the new approach will measure success. South Dakota’s chosen focus areas—literacy, math, and family engagement—are measurable and responsive to post-pandemic learning gaps. If the state can show credible progress, the waiver could become a model for others. If results are ambiguous, federal appetite for further experiments may cool.

Next Steps for Leaders in South Dakota and Other States

  • For SDDOE and South Dakota districts: Immediately reallocate compliance staff toward instructional coaching, curriculum support, and data systems tied to the three priority areas (literacy, math, family engagement). Establish baseline metrics now so that impact can be demonstrated by the 2026–27 school year.
  • For local education agencies: Inventory existing Title I, Title III, and after-school program expenditures and identify redundancies. Under the consolidated framework, repurpose savings toward evidence-based interventions in math and reading—the two areas explicitly flagged in the state’s application.
  • For other state education agencies: Assess whether federal grant silos are impeding a cohesive improvement strategy. If so, consider filing an RES waiver application; the Department’s recent messaging and the 2025 executive order suggest a receptive environment. Reach out to South Dakota or the five existing RES states to understand the administrative lift and reporting trade-offs.
  • For education vendors and service providers: Monitor South Dakota’s upcoming requests for proposals tied to literacy and math improvement. The consolidation of funds may create larger, more integrated contract opportunities than the fragmented grants of the past.