Hawaii schools looking into contingency plans for $33 million lost in federal funds

HONOLULU (KHON2) — School officials across the state want to reassure parents and families that they are doing all they can to make sure the upcoming school year runs as smoothly as possible, despite possibly losing millions of dollars in federal funds.

We’re just weeks from the start of the 2025-26 school year, and officials are scrambling to make contingency plans after the US Department of Education recently announced it’s freezing $6.8 billion in funding for states.

“All states were caught off guard by this announcement that the funds that were already appropriated were not coming as planned,” said Tammi Oyadomari-Chun, Hawaii Department of Education Deputy Superintendent of Strategy and Administration. “So we are actively in the process of assessing all the plans that are in place and the funds that are available.”

Hawaii is losing out on an estimated $33 million. That money would fund six key programs, including recruitment and training of teachers, academic enrichment and English proficiency.

“We are in the process of working with our program managers to ensure that schools can start the school year with the programs and staffing that they already have in place, that they had planned for, so that we can make sure to provide the best services for students,” said Oyadomari-Chun.

Officials at Chaminade University say graduate students won’t be able to get federally backed loans.

“That will impact us greatly,” said Lynn Babington, PhD, Chaminade University President. “We have five doctoral programs and a whole lot of master’s programs.”

The school says it has reached out to all affected students and is shifting some of its scholarship money to help with any shortfall.

“We want our families to know that they need not worry,” said Babington. “The financial aid we promised will be there immediately for the students as they enter as freshmen, and those continuing students as well.”

Hawaii is one of 24 states that have filed a lawsuit against the U.S. Department of Education, stating that freezing the money violates federal statutes.

If needed, Hawaii DOE officials say they could come here to the state legislature and ask lawmakers for more funding. They are hoping that it won’t be necessary.

“We are hopeful that the federal government will release the funds shortly and that this is just the delay in receiving the funds,” said Oyadomari-Chun.

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The first day of public school in Hawaii is August 4.