Paying for AI work with federal funds
Federal guidance identifies opportunities to support AI-related work, including staff training. Districts still need to establish whether a particular expense fits a particular award.
The funding conversation should begin while a district is defining the work. The intended outcomes, participants, schedule, and deliverables all affect whether an expense belongs under an existing federal grant.
Two Department of Education documents are useful here. A July 2025 letter addresses allowable uses of federal funds. An April 2026 supplemental priority addresses certain discretionary grant competitions. Neither provides blanket approval for an AI engagement.
What the July 2025 letter says
On July 22, 2025, the Secretary of Education issued guidance addressing AI uses supported by formula and discretionary grants. It identifies three areas: instructional materials, tutoring, and college and career advising.
Under instructional materials, the letter expressly includes:
Train educators, providers, and families to use AI tools effectively and responsibly.
That language provides a useful starting point for discussing staff development with the district's federal programs and business staff. The letter also emphasizes educator leadership, responsible use, accessibility, transparency, and protection of student information. July 2025 guidance letter
The permission is conditional. The proposed use must meet the applicable program's statutory and regulatory requirements. The letter does not identify specific funding streams or establish that any available award can pay for any AI-related service.
A district therefore needs to connect the proposed training to the purposes and requirements of the award it intends to charge.
What the April 2026 priority does
The Department published its final supplemental priority on Advancing Artificial Intelligence in Education on April 13, 2026, effective May 13, 2026. It may be used in discretionary grant competitions.
The priority includes educator professional development on AI fundamentals, integration into subject areas, responsible use, and age-appropriate instruction.
Its effect depends on the competition notice:
- Absolute priority: Applications must meet it to be considered.
- Competitive preference priority: Qualifying applications receive additional points or a specified selection preference.
- Invitational priority: The Department encourages applications addressing it but gives them no preference on that basis.
Districts should check whether a particular competition uses the priority and which components apply. Mentioning AI in a proposal does not automatically improve its score. The application must respond to the requirements actually published for that competition. April 2026 final priority
What still needs to be established
Neither document creates a funding source or overrides the requirements of an individual grant.
Federal cost rules still apply. Among other conditions, an expense must be necessary and reasonable for the award, properly attributable to it, and adequately documented. A worthwhile training program is not automatically an allowable charge to a particular grant. Federal cost requirements, 2 CFR § 200.403
The district should also determine whether the work fits its approved plan and budget, whether an amendment or prior approval is needed, and which procurement requirements apply.
Scheduling an engagement across two budget years does not resolve those questions. Each charge still needs to fit the relevant award and its funding period.
Questions to settle before choosing a provider
Bring a preliminary scope and the federal documents to the district's business office and federal programs staff. Ask:
- Which current awards could support this work, and how would it advance each award's purpose?
- Which participants and activities would be eligible?
- Does the work require a plan or budget amendment before funds are obligated?
- What procurement process and documentation are required?
- What funding deadlines affect the schedule?
- Are there upcoming discretionary competitions that expressly use the AI priority?
- What additional state requirements apply?
Start locally, then seek clarification from the state education agency or the relevant federal program contact as appropriate. A general statement about AI funding cannot substitute for an answer about the district's award.
Put the funding requirements into the scope
Once the district identifies an allowable funding approach, the engagement should describe the work precisely: who will participate, what they will learn, how the activities support the funded program, when services will occur, and what the provider will deliver.
That detail helps the district evaluate the proposal and document the expense. It also reduces the risk of commissioning a broad AI engagement and later discovering that only part of it fits the intended funding source.
Putting a scope together?
We work with districts to prepare scopes, budgets, and deliverables in the form their business offices require. The district determines funding eligibility; our role is to make the proposed work clear enough to review and, when approved, document.