A federal judge on Tuesday halted the Trump administration’s decision to effectively cancel more than $1 billion in K-12 education funding for more than a dozen states—but left the door open for the U.S. Department of Education to again terminate the funding after giving states advance notice.
Judge Edgardo Ramos said in the May 6 order that the 16 Democratic state officials who sued along with the District of Columbia had shown sufficient reason to halt a March 28 letter from Education Secretary Linda McMahon abruptly announcing that the administration had moved up the due date for spending remaining pandemic relief funds.
Ramos’ order prohibits the Education Department from enforcing or implementing the letter’s cancellation of those spending extensions for the 16 states and the District of Columbia through the course of litigation or until a subsequent court order. The department also cannot modify those extensions for the states that sued to spend their pandemic dollars without providing at least 14 days’ notice announcing a new deadline. His order doesn’t apply to states that didn’t participate in the lawsuit.
The Education Department did not immediately respond to a message seeking comment.
In the lawsuit, the states argued that the abrupt termination of the extensions was causing budget shortfalls.
New York Attorney General Letitia James, who led the coalition of states filing the lawsuit, said in a statement the injunction was a “major win” for students and teachers. New York lost access to $134 million in funds from the Education Department’s rescission, according to a news release from James’ office.
“The Trump administration’s illegal decision to cut off essential education funding put some of our most vulnerable students at risk of falling behind in school,” James said.
Ramos’ order endorsed at least one piece of the states’ argument—that the federal agency circumvented procedural steps it needed to take to change the spending deadline. The department could correct that procedural error by issuing a letter that provides states with sufficient notice of a changed deadline.
“It’s a pretty early step in the case, and it isn’t determinative of the outcome,” said Katie Roy, partner and general counsel with Education Resource Strategies, which consults with school districts.
States had raised concerns about harm to programs and students if funding were to stop
In her March 28 letter, McMahon told states that, by failing to meet earlier deadlines for spending COVID relief funding, states “ran the risk that the Department would deny your extension request.” McMahon said in the letter, sent after 5 p.m. on a Friday, that the deadline for spending the funds had passed that same day at 5 p.m.
“Extending deadlines for COVID-related grants, which are in fact taxpayer funds, years after the COVID pandemic ended is not consistent with the Department’s priorities and thus not a worthwhile exercise of its discretion,” she wrote, adding the department would consider extensions on “an individual project-specific basis.”
At a Tuesday hearing in the case, Ramos said the reasoning in McMahon’s letter was “not a reasonable explanation” and that Congress didn’t intend for the funding to end when the federal government declared the COVID-19 emergency to be over, Courthouse News Service reported.
More than 40 states had secured approval from the department—including some while McMahon was in charge—for up to 14 additional months to spend those dollars, largely for contracted expenses like construction and tutoring, when the education secretary ended those extensions. States had already faced a Sept. 30, 2024, deadline to commit to spending those funds for specific services and programs.
In her letter, McMahon said that, instead of blanket approvals to extend the spending timeframe, the Education Department would consider project-by-project extension requests.
Along with the District of Columbia, the states that sued were Arizona, California, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Pennsylvania.
Court documents in the case show that the Education Department has started granting some extensions to spend money after McMahon’s March letter, and denying other requests.
Hayley Sanon, the principal deputy assistant secretary and acting assistant secretary for the office of elementary and secondary education, sent a letter May 2 approving continuing funds for four projects in Arizona, while denying four other requests from the state. In the denials, she explained that the projects did not directly support students or their academic recovery.
“I found the projects to be inconsistent with the Department’s priorities and thus not a worthwhile exercise of its discretion,” she wrote in her letter.
Several state chiefs, including in Republican-led states such as Mississippi, pushed back on McMahon’s abrupt rule change, arguing that schools would be forced to default on contracts and cut vital services for students if she didn’t reverse course. But only Democratic state officials sued, which means that for now, only their states are getting relief from the court ruling.
Ramos, an appointee of former President Barack Obama, also directed the department to provide written notice to all agency staff and submit evidence to the court of that notice within three days.
