The Trump administration may push for a shift away from the current formula-driven federal K-12 education funding toward more flexible block grants -- part of a broader effort to significantly scale back the U.S. Department of Education and direct more education policy decision-making to the states. If Congress authorizes this new flexibility, state leaders and policymakers must be prepared to use it wisely in service of students and schools. The concept of block granting could be straightforward from a federal accounting perspective but would present new challenges and opportunities for state policymakers. While it would not likely provide states with more overall federal funding, block granting could give states much more flexibility on how they spend their funding. The degree of that flexibility, however, is an open question. This memo anticipates key policy questions and options state policymakers will need to consider if Congress converts federal education funding to block grants -- with a focus on ensuring that federal funds continue to target support to marginalized students (e.g., multilingual students, students with disabilities, students from low-income families). It is not an endorsement of this funding approach, nor does it try to predict exactly how Congress will implement it. If state policymakers are granted broad authority to allocate federal education funding, they must ensure that those dollars continue to target supports for marginalized students. This memo explores how different allocation choices could give states more or less control over the use of funds but does not dig deeply into the details of how states could use that control to drive K-12 programmatic decisions at the local level. Readers should not interpret the choice to focus on questions of allocation first as an implication that the use of funds is less important. In fact, if states do get substantial flexibility to direct both the allocation and use of funds, there is real opportunity for states to better allocate funding to benefit students and real risk that funding is diverted in ways that harm students who most need the supports these funds currently provide.