Sneak Preview: Several States Sue ED’s Freeze on Grant Funding

Jerry Ashworth
July 17, 2025 at 08:06:42 ET

(The following was excerpted from a recent Thompson Grants Compliance Expert article.) Attorneys general from 23 states and two governors on July 14 sued the Trump administration for withholding about $7 billion in education funding that had been approved by Congress.

On June 30, the Department of Education (ED) and the Office of Management and Budget (OMB) abruptly froze disbursements for six federally funded education formula grant programs. The attorneys general requested that the court overturn the freeze in funding, noting that this action has created chaos in school systems nationwide.

“The federal government cannot use our children’s classrooms to advance its assault on immigrant and working families,” said New York Attorney General Letitia James. “This illegal and unjustified funding freeze will be devastating for students and families nationwide, especially for those who rely on these programs for child care or to learn English. Congress allocated these funds, and the law requires that they be delivered. We will not allow this administration to rewrite the rules to punish the communities it doesn’t like.”

ED was required to issue the congressionally approved funding by July 1 to ensure that schools receive resources ahead of the new academic year, and cited no legal justification for the freeze, according to the lawsuit. The affected programs are the Migrant Education Program, Title II-A, Title III-A, Title IV-A, Title IV-B (i.e., the 21st Century Community Learning Centers Program), and Adult Education Grants.

The attorneys general explained that states on June 30 received a “vague, three-sentence email” claiming that a “review” was underway to align funding with “the president’s priorities,” without providing details on the duration or scope of the review. OMB has since claimed that the funding had been used to “subsidize a radical left-wing agenda” and to “promote illegal immigrant advocacy organizations,” which the plaintiffs stated is “patently false.” OMB also raised objections to the use of funds for scholarships for immigrant students and lessons on LGBTQ+ topics.

The funding freeze, according to the plaintiffs, impacted summer school and after-school programs that provide child care for working families, as well as professional development for teachers and support for English learners. They added that states have had little time to find replacement funding to address these needs, as budgets were finalized, staff were hired and contracts were signed based on the expectation that the funds would arrive on July 1. States and school districts may be forced to break contracts and slash programs they can no longer afford, they also contended.

(The full version of this story has now been made available to all for a limited time here.)

Join us for our following Thompson Grants event:
2025 Federal Grants Forum: State and Local | Sept. 16-17, 2025 | Virtual Event