Vermont education officials scramble after DOE signals review of COVID-era reimbursements

House Education Committee members heard on April 2 that new guidance from the U.S. Department of Education has sharply changed how the department will handle liquidation-extension requests for COVID-era funds, creating immediate reimbursement risk for Vermont districts and new work for the Agency of Education.

Shildrick Campbell, deputy secretary of education, told the committee that national meetings last week gave state chiefs some assurances but that a later Department of Education letter introduced new uncertainty: “We were hearing rumors that, the Department of Ed was going to release, a directive that basically froze access to those funds by 5PM.” He said the agency was able to submit $1,300,000 for reimbursement before the department’s letter was posted at 5:03 p.m.

That letter, Campbell said, announced the department would review requests “on a project-by-project basis” and disavowed commitments made under the previous administration. Under the earlier approach, states that gave preliminary approval to district reimbursement requests were told districts could proceed with activities; the new letter alters review standards and the process for seeking extended liquidation authority for ESSER and related COVID-era funds.

Why it matters: Vermont officials estimate local education agencies (LEAs) have roughly $16.7 million of potential exposure tied to liquidation-extension activity, with the state education agency’s own exposure much smaller (about $360,000 at the time of the briefing). Campbell warned that exposure varies by district — some have already paid vendors and await reimbursement, some were closing construction projects and have larger invoices, and others had planned summer services or staffing that relied on extended liquidation authority.

What the Agency of Education (AOE) is doing: Campbell said AOE staff immediately advised districts and vendors to pause grant-funded activities and closed out what it could. The agency has been conducting one-on-one meetings and office hours with districts, asking vendors to submit outstanding invoices by the end of the week, and preparing waiver submissions that it hopes will meet any new Department of Education criteria. “We do plan to submit waivers for everything at the SEA level,” Campbell said.

Timing and technical details: Campbell reviewed standard federal grant timing: a period of performance that for most ESSER awards ended Sept. 30, 2024, followed by a liquidation period to pay invoices and close grants. The Biden administration previously permitted an extended liquidation period under guidance; the new letter changes review terms and asks states to justify why the department should grant continued access. Campbell said the department’s new review language shifts away from COVID-specific allowable uses toward whether an activity “addresses the needs of American students.” He said the department has not specified what “project” means, what format is required, or who will do the reviewing.

Immediate figures and examples: The agency reported it was able to meet the department’s 5 p.m. window for at least one reimbursement submittal ($1,300,000) but had not yet received approval. Campbell estimated the largest single district exposure he could cite offhand at about $5,000,000 but said those numbers are being clarified as vendors submit invoices. He described categories of exposure: districts that paid vendors and await reimbursement, districts that sought extended activities and have paid, and districts still in closeout or planning phases.

Wider federal budget concerns: Committee members and AOE staff also discussed the FY25 federal funding picture and longer-term risk from reconciliation proposals in Congress. Campbell and his colleagues said they have been told, informally, that many education programs received FY24-level funding in the continuing resolution, but the agency is awaiting official allocations. They also described the broader reconciliation process as a potential source of programmatic and fiscal change and noted deadlines and timelines in play (May announcements, Oct. 1 fiscal year start, Dec. 31 statutory drop-dead dates related to tax provisions).

Data and reporting burdens: AOE staff emphasized an additional operational problem: federally required annual performance reporting related to ESSER remains due. The vendor-hosted platform that holds required performance data will need to be offloaded to state staff, a labor-intensive process Campbell said could require weeks of work. He warned that the department’s staffing and contract changes at the federal level have reduced technical support and complicated data submissions.

Flexibility and waivers: Committee members pressed on whether the new Department of Education stance could create more state flexibility. Campbell said the department told states they were open to waivers and to reapply for authorities previously denied, and he noted Vermont already has EdFlex authority for some program waivers. Yet he cautioned that any significant programmatic changes ultimately depend on congressional action and that a reconciliation process could include programmatic language if proponents argue the primary effect is fiscal.

Discussion vs. decisions: The briefing recorded several operational decisions (AOE asked vendors to pause work; the agency submitted $1.3 million for reimbursement and is collecting outstanding invoices) and many ongoing discussions (how and whether to submit project-level waivers; how to prioritize submissions for the highest chance of success). No formal votes or legislative actions were recorded in the transcript on this topic.

Next steps: Campbell said the agency will continue direct outreach to districts, compile vendor invoices this week, finalize waiver materials, coordinate with the federal delegation, and post updates to the AOE website as allocations and guidance arrive. He said the agency would provide committee updates when allocations and additional federal direction are received.

Sources: Remarks to the House Education Committee by Shildrick Campbell, deputy secretary of education, Agency of Education, April 2, 2025; submissions and exchanges described in committee testimony.