Transformational Reforms and Updates to Ensure Educational Quality and Urgent Investments in Today's Youth Act of 2021 or the TRUE EQUITY Act This bill establishes various grant programs to address educational inequities in elementary and secondary schools. Specifically, the bill creates grant programs related to (1) early childhood education, (2) high-quality and diverse teachers and leaders, (3) college and career readiness pathways, and (4) additional resources for at-risk students. For each grant program, the Department of Education (ED) must award a single grant to an eligible state. To be eligible for a grant, a state must establish an independent state oversight board. The oversight board must, among other duties (1) determine whether the state and its local educational agencies (LEAs) have met state educational equity goals, and (2) hold them accountable for failing to meet those goals. ED may renew a grant if the oversight board determines the state has met its goals. In addition, for each grant program, the bill outlines the activities authorized under the program, maintenance-of-effort requirements, and matching fund requirements. Finally, the bill permits ED to enter into a local flexibility demonstration agreement, through which a state educational agency may use funds to develop and implement a school funding system based on weighted per-pupil allocations for low-income and disadvantaged students. (Currently, ED may enter into these agreements with LEAs.)