States sue Trump administration over termination of Covid recovery grants for schools

MANHATTAN (CN) ­— New York Attorney General Letitia James on Thursday led a coalition of 16 states and the District of Columbia in suing the Trump administration to restore states’ extended access to Department of Education programs that supported low-income and unhoused students and provide funding for other services to address the long-term effects of the Covid-19 pandemic on K-12 students.

“The Trump administration’s latest attack on our schools will hurt our most vulnerable students and make it harder for them to thrive,” James wrote in a statement announcing the 55-page complaint.** ** “Cutting school systems’ access to vital resources that our students and teachers rely on is outrageous and illegal. As a proud graduate of New York public schools, I will continue to use every tool at my disposal to fight for our schools and make sure every child has access to a quality education.”

Filed in the Southern District of New York federal court, the states argue that the Department of Education’s decision under Trump to abruptly cut off access to awarded funds violates the Administrative Procedure Act because it reversed its prior decision to allow states to access the funds through March 2026 and instead immediately terminated the states’ access without a sufficient explanation and contrary to Congress’ intent.

“Congress did not tie the availability of funds to the period of the public health emergency. Congress’ clear intent — as expressed in the intended use of the education stabilization funding to, among other things, help students make up for lost instruction time in the aftermath of the pandemic — demonstrates that the education stabilization funds were to continue to be available post-pandemic,” the states argued in the complaint. “In contrast, in other contexts, Congress has taken action to rescind the appropriations when the federal government declared the pandemic to be over.”

The multistate coalition seeks a preliminary and permanent court order preventing the Department of Education from arbitrarily changing its position so the states can continue to access these essential funds.

Joining New York in filing this lawsuit are the attorneys general of Arizona, California, Delaware, Hawai’i, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, Nevada, Oregon, and the District of Columbia, along with the governor of Pennsylvania.

According to the complaint, California and Pennsylvania each had over $200 million in total unliquidated education stabilization funds remaining on March 28, 2025, when the Department of Education notified states that it was unilaterally ending access to hundreds of millions of dollars in grants from the American Rescue Plan Act (ARPA).

New York, meanwhile, lost access to $134 million in funds due to the Trump administration’s decision to cut off the grant funding.

Passed by Congress in 2021 to help hasten the nation’s recovery from the economic impact of the Covid-19 pandemic, the American Rescue Plan awarded billions of dollars in flexible relief funds to the states. The money was earmarked to support essential workers, invest in infrastructure and respond to the public health emergency caused by the pandemic.

To combat the long-term effects of the Covid-19 pandemic, the American Rescue Plan Act funded three education-related programs to help support states’ school systems and direct more resources to the most vulnerable students. These three programs — Homeless Children and Youth (HCY), Elementary and Secondary School Emergency Relief (ESSER) and Emergency Assistance to Nonpublic Schools (EANS) — provide essential resources to help schools and students recover from the lasting impacts of the pandemic.

Some of the funding addressed the disproportionate impact of the coronavirus on economically disadvantaged students, children with disabilities, English learners, racial and ethnic minorities, migrant students, students experiencing homelessness, and children and youth in foster care.

In New York, the remaining unliquidated grant funds were earmarked for repairs and improvements to school ventilation systems, as well as educational programs like tutoring, professional development, and mental health counseling, designed to address the learning loss resulting from the Covid-19 pandemic

The funding also supported critical repairs and improvements to school buildings like the construction of additional classroom space, the purchase of additional library books and playground equipment, and the addition of wheelchair-accessible buses, the complaint states.

The civil complaint names as co-defendant Linda McMahon, the former wrestling executive appointed by Trump to sit as national education chief while carrying out Trump’s stated goal of dismantling the agency.

Trump has promised to shut down the department entirely and said he wants McMahon “to put herself out of a job.”

California, Massachusetts, New Jersey, Colorado, Illinois, Maryland, New York and Wisconsin sued the administration in March, claiming that separate cuts to education grant funds — to recruit and train teachers to work in high-need rural and urban school districts — exceeded $250 million in their states alone.

The Supreme Court overturned a lower court’s order restoring millions of dollars in grant funding for teachers, ceding to the president’s claims that a federal judge exceeded judicial authority.

The Department of Education made the cuts last month as part of a broader effort from President Trump to eliminate diversity, equity and inclusion initiatives and reduce federal spending. The Trump administration said the cut funding was going toward training teachers on “divisive ideologies” like anti-racism, which run afoul of the administration’s platform.

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