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Legal & Employment Guidance

Are the President's Actions About Public Schools Legal?

Attorneys weigh in on the Trump administration's recent education actions.
Published: March 27, 2025 Last Updated: September 15, 2025

Since Inauguration Day, the Trump administration has attacked public education and inclusive policies, often in direct conflict with existing law.

Here is a deeper look at the legality of the Trump administration’s actions.

View past legal updates:

September 26, 2025
September 12, 2025
August 26, 2025
August 14, 2025
July 31, 2025

Legal Rundown PDF archive to March 27, 2025


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September 26, 2025

Litigation Updates

NEA Victory: Appeals Court Upholds Collective Bargaining Rights of Federal Workers

On September 25, in a 2-to-1 decision, the D.C. Circuit Court of Appeals rejected the government’s request for a stay pending its appeal of a district court’s preliminary injunction which blocks the Trump Administration from enforcing a March executive order stripping collective bargaining protections from most of the federal workforce, as applied to FEA-represented educators working in Department of Defense schools around the globe. The per curiam decision faulted the Trump Administration for its failure to make “a meaningful attempt” to show that the government would suffer any imminent irreparable harm if the injunction took effect while its appeal moves forward. The lawsuit was filed by NEA on behalf of the Federal Education Association and other federal educator unions.

District Courts Block Trump Immigration Status Policy for Federal Benefits Programs

On September 10, a Rhode Island district judge issued a preliminary injunction halting the Trump Administration’s effort to restrict federal benefits like Head Start, adult education, and career training to verified U.S. citizens and immigrants with legal status. The court criticized the “rushed” rollout, noting it would harm beneficiaries, the state plaintiffs, and eligibility verifiers. The order applies to 20 states and D.C., whose attorneys general sued the Administration. A Washington State district court issued a similar universal injunction against the policy the following day, blocking enforcement nationwide.

District Judge Allows Mass NSF Grant Terminations to Proceed

On September 10, a D.C. district judge declined to restore over $1 billion in federal grants awarded by the National Science Foundation (NSF) for programs aimed at increasing the participation of underrepresented groups in science and engineering, which were terminated because they were related to diversity, equity and inclusion policies disfavored by the Administration. The court ruled that it lacked jurisdiction to temporarily reinstate the funding and that the plaintiffs failed to demonstrate “irreparable harm” from NSF’s new grant policies. The judge cited in part a recent U.S. Supreme Court ruling that universities and researchers facing mass federal funding cuts must pursue their claims to recover grant awards in the Court of Federal Claims, a separate federal court that handles monetary and contractual disputes with the U.S. government.

Appeals Court Lets Federal RIFs Continue

On September 19, the 9th Circuit Court of Appeals vacated a California district court’s preliminary injunction that prevented the Trump Administration from implementing sweeping, agency-wide reductions in force and reorganizations under a February EO. The lawsuit, filed by six federal employee unions (including the American Federation of Government Employees), nonprofit organizations, and local governments, was remanded for further proceedings in light of the U.S. Supreme Court’s stay order and decision in Trump v. Casa, which limits the power of district courts to issue nationwide injunctions.

District Judge Strikes Down National Endowment for the Arts’ "Gender Ideology” Policy

 September 19, a Rhode Island district judge partially enjoined the National Endowment for the Arts from applying a viewpoint-based standard in reviewing grant applications which would disfavor applications deemed “to promote gender ideology.” The standard was meant to align with Trump’s January “Gender Ideology EO. The court found that the plaintiffs had proven their First Amendment and APA claims but rejected their Fifth Amendment vagueness challenge, noting the policy was adopted after the plaintiffs had submitted their grant applications and did not expand the agency’s discretion to decide which grant applications to fund.

District Court Orders University of California Funding to be Restored

On September 22, a California district judge issued a second preliminary injunction requiring the National Institutes of Health, the Department of Transportation, and the Department of Defense to release more than $500 million in terminated research grants awarded to researchers across the University of California system. The court found that the terminations violated the APA and noted that the Administration did not provide grant-specific rationales for the cancellations that considered the reliance interests of grantees and their institutions. The judge had previously enjoined the termination of grants awarded to UC researchers by the EPA, NSF, and National Endowment for the Humanities on the same grounds. A similar lawsuit filed on September 16 by a coalition of 19 education unions and faculty associations, arguing that the Administration’s actions violate the First, Fifth, and Tenth Amendments, the Spending Clause, and the APA, has been designated as related.

Kentucky Agrees to End In-State Tuition Policy for Undocumented Students

On September 22, Kentucky became the third state to agree to end its policy allowing undocumented students to pay in-state tuition at public colleges and universities, in response to a suit filed by the Department of Justice (DOJ) back in June. The suit claimed that Kentucky’s policy violates a federal statutory provision by granting benefits to undocumented students that are not available to out-of-state U.S. citizens. Texas and Oklahoma both agreed to end their policies in consent judgments that quickly closed their cases, while cases in Minnesota and Illinois are still pending. Kentucky Students for Affordable Tuition has filed a motion to intervene, but the court has yet to rule on that request.

AFT Sues ED Over Student Loan Forgiveness Delays

On September 9, the American Federation of Teachers (AFT) filed a class action lawsuit arguing that ED has unlawfully denied student loan borrowers their rights to affordable repayment plans and loan forgiveness programs. AFT is seeking an injunction to cancel the debts of borrowers on income-driven repayment plans who have been in repayment for 20 or 25 years and force ED to process thousands of outstanding requests for the Public Service Loan Forgiveness “Buyback” program.

DOJ Challenges Rhode Island Loan Forgiveness Program for Educators of Color

On September 16, DOJ filed a lawsuit against the Rhode Island Department of Education and the Providence Public School District over a program funded by a non-profit organization that provides up to $25,000 in student loan forgiveness to new teachers of color in Providence. Arguing that the program violates Title VII because it excludes white teachers, DOJ seeks a permanent injunction stopping the program’s implementation and an award of equal loan forgiveness to “non-minority new . . . teachers who were not eligible for the Program on the basis of race.”

Recent Executive Actions Impacting Education

Rerouting Education Grants to Charter Schools, Civics Education, and HBCUs

On September 15, the U.S. Department of Education (ED) announced its plans to redirect millions of federal dollars from grant programs it deems “ineffective and discriminatory.” According to the New York Times:

  • ED will award an additional $60 million in grants to charter schools, bringing the total to $500 million. To fund the increase, the Administration terminated $15 million in grants for magnet schools, $9 million in grants for gifted and talented programs, and $31 million awarded through the Ready to Learn program, which funded PBS shows for young children.
  • ED will award an additional $137 million in grants to support American history and civics education, bringing the total to $160 million. To fund the increase, the Administration terminated nearly $140 million in grants previously awarded through congressionally created and funded teacher training programs that, it claims, promoted “divisive ideology.”
  • ED will provide an additional, one-time grant of $435 million to Historically Black Colleges and Universities (HBCUs) and $60 million to Tribally Controlled Colleges and Universities (TCCUs). To fund the increase, the Administration defunded programs that award grants to Minority Serving Institutions (MSIs), for which Congress had appropriated $350 million.

Is this Legal?

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ED claims it can terminate grants for programs it disfavors and redirect the funds toward ones it wants to expand through a process called “reprogramming,” in which agency account funds are used for purposes not explicitly intended by Congress. While agencies have some discretion to reprogram funds, they cannot use reprogramming to achieve goals inconsistent with the statutes that create and fund grant programs — particularly not to unilaterally shut down congressionally mandated programs. Likewise, ED can only cancel or discontinue previously awarded grants through statutory and regulatory processes, and only for limited reasons that generally do not include policy or political disagreements with Congress’s decision to create and fund the grant program. ED has not complied with these requirements, making the terminations that have freed up money for reprogramming unlawful.

Advancing a “Patriotic Education”

On September 17, ED published a proposed priority for forthcoming grant competitions, which would require successful applicants for ED- funded grants to demonstrate their commitment to promoting “patriotic education” or civics programs that present “an accurate, honest, unifying, inspiring, and ennobling characterization of the American founding and foundational principles.” That same day, ED launched the America 250 Civics Coalition, a group of 40+ conservative organizations (including Turning Point USA, Moms for Liberty, and PragerU) tasked with “renewing patriotism” and “advancing a shared understanding of America’s founding principles” by developing educational programming consistent with the Administration’s understanding of American history. The move comes after ED cut nearly 75% of federal American History and Civics grants slated for renewal this year, seemingly targeting programs teaching topics such as Black, Mexican, and LGBTQ+ history on the grounds that these projects do not align with the Administration’s commitment to “merit, fairness, and excellence.”

Is this Legal?

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Courts have consistently held that agency grant policies imposing viewpoint-based restrictions (such as penalizing applicants for expressing certain ideas) violate the First Amendment and are invalid under the APA. Agencies generally lack the authority to disfavor applications based on viewpoint or to weigh factors outside Congress’s intent in establishing a program. ED's governing statutes explicitly bar the agency from exercising “any direction, supervision, or control” over “curriculum” or “program[s] of instruction.” As a New Hampshire district judge found in granting NEA’s motion to preliminarily enjoin ED’s attempts to restrict discussions and programs on DEI in educational institutions, efforts to use grant awards to coerce schools and universities into promoting certain concepts while chilling them from discussing others violate these constitutional and statutory provisions.

Imposing Greater Financial Oversight on Harvard University

On September 19, ED’s Office of Federal Student Aid (FSA) placed Harvard on heightened cash monitoring, a status typically reserved for financially unstable institutions, and demanded that the University provide a $36 million bond or other acceptable collateral. These steps will require Harvard to use its own funds to provide federal student aid to students and then seek reimbursement from FSA. ED cited three “triggering events” for the drastic measures: a Department of Health and Human Services finding that Harvard continues to permit alleged antisemitism on campus in violation of Title VI; claims that the University has not cooperated with ED’s ongoing investigation through its Office for Civil Rights; and Harvard’s issuance of $1 billion in bonds to offset its federal funding that was cut by the Administration.

Is this Legal?

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While ED has authority to place institutions on heightened cash monitoring, this step is typically reserved for colleges in dire financial straits, not institutions like Harvard with multi-billion-dollar endowments. Like the Administration’s decision to freeze Harvard’s federal funding (which a Massachusetts judge found to be unlawful), this latest action appears to be part of an escalating pressure campaign to force Harvard to capitulate to the Administration’s demands and fall in line with Trump’s anti-DEI agenda. Such retaliation against a private university for refusing to express the government’s preferred viewpoints likely violates the First Amendment.

Targeting Educators Over Criticism of Charlie Kirk

Since September 10, the Trump Administration and its allies have used the assassination of right-wing political activist Charlie Kirk to call for widespread repression of speech that is alleged to be critical of Kirk and his viewpoints. Educators across the country have faced scrutiny and, in some cases, suspensions or firings often for social media posts because of this political pressure. Calls by state officials for public employees to be reported for their off-duty speech have resulted in hundreds of complaints being filed in a handful of states. Far-right groups have fueled this effort with mass doxxing, including the now-removed site Expose Charlie’s Murderers,” which posted personal information on more than 50,000 individuals accused of criticizing Kirk. Secretary of State Marco Rubio has also threatened that foreign visitors (including international students and educators) who post content critical of Kirk on social media could have their visas revoked.

Is this Legal?

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Public employers like schools and universities have broad authority to limit their employees’ speech on the job. But off-duty speech by public employees, including educators, on matters of public concern should be protected by the First Amendment unless the speech creates disruption in the school or university community or the employer reasonably anticipates such disruption, or the speech constitutes an actual threat. Firing, suspending, or disciplining educators for their off-duty speech may be unlawful, depending on the nature and context of the educator’s speech and its effects on the school or university. Some educators who have been penalized for their online, off-duty speech have filed lawsuits, and a South Dakota federal court this week temporarily enjoined the University of South Dakota from taking any further adverse employment action against a professor who briefly posted about Charlie Kirk on his personal Facebook page, since the post was made while the professor was off-duty and the employer did not show any disruption to campus operations and activities. Beyond the First Amendment, educators may be protected from discipline based on their off-duty speech by state tenure laws, district policies, or their collective bargaining agreement. As to non-citizens, litigation about the Administration’s efforts to deport immigrants and foreign students based on their speech in support of Palestine remains pending, but to date, no court has found that the President can punish non-citizens' speech by revoking green cards or visas.

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September 12, 2025

Litigation Updates

NEA Joins Lawsuit to Restore Sensitive Locations Guidance

On September 10, NEA and AFT joined a lawsuit seeking to reinstate longstanding Department of Homeland Security (DHS) guidance that restricted immigration arrests at certain “sensitive locations,” including schools, hospitals, courthouses, and churches. The lawsuit argues that DHS’s revocation of the guidance violates the First Amendment, the Religious Freedom Restoration Act, and the Administrative Procedure Act.

District Judge Declares Harvard Funding Freeze Unlawful

On September 3, a Massachusetts district judge ruled that the Trump Administration’s termination of Harvard University’s federal funding, allegedly to remedy antisemitism, was a “targeted, ideologically-motivated assault on this country’s premier universities” and violated the First Amendment, Title VI procedural requirements, and the Administrative Procedure Act. The Administration plans to appeal, but has begun to reinstate some of Harvard’s unlawfully canceled grants.

SCOTUS Rules Race Can Be Factor in Stopping Suspected Undocumented Immigrants

On September 8, the U.S. Supreme Court issued an unreasoned, unsigned emergency stay order that allows federal immigration officers to indiscriminately stop individuals who they believe may be undocumented based on factors like race, accent, location, or occupation. The 6-3 order lifts a district court’s temporary restraining order blocking such stops in the Los Angeles area. Justice Sotomayor, joined by Justices Kagan and Jackson, dissented, warning that the order creates “a country where the Government can seize anyone who looks Latino, speaks Spanish, and appears to work a low wage job.” The order is not a final decision in the case, which continues to be litigated in the lower courts.

Appeals Court Allows Mass Firings of Probationary Workers to Proceed

On September 8, the Fourth Circuit Court of Appeals vacated a preliminary injunction in a lawsuit brought by 19 states and D.C. that indefinitely barred the Trump Administration from terminating thousands of probationary federal employees. The court found that the plaintiff states’ monetary harms from the terminations were not sufficient to establish standing in the context of the “traditionally federal function” of managing the federal workforce and directed the district court to dismiss the case.

SCOTUS Blocks Enforcement of South Carolina Trans Bathroom Ban (For Now)

On September 10, the U.S. Supreme Court issued a brief, unsigned order denying South Carolina’s request for an emergency stay of an injunction preventing the state from enforcing its transgender bathroom ban in schools pending appeal. The Court emphasized that it was not weighing in on the underlying merits but simply applying “the standards applicable for obtaining emergency relief,” such as whether the state would be permanently harmed if the lower court’s ruling were not put on hold.

District Judge Dismisses Virginia Schools’ Lawsuit Defending Trans-Inclusive Policy

On September 5, a Virginia district judge dismissed a lawsuit challenging the Department of Education’s (ED) decision to put two Virginia public school districts on “high-risk status” (subjecting them to additional monitoring requirements and putting them at risk of losing their federal funding) because they allow transgender students to use facilities that correspond to their gender identity. Embracing an extremely broad view of recent decisions finding that the federal Tucker Act requires recipients of federal funding who challenge the termination of funding awards to bring suit in the Court of Federal Claims, the judge found that the district court “lacks subject matter jurisdiction” to require the government to restore or prevent it from freezing funds.

District Judge Blocks Trump Administration’s Transgender Passport Restrictions

On September 9, a Maryland district judge granted a preliminary injunction to six transgender individuals who, under a Trump Administration policy, were denied passports matching their gender identity. The court ruled that the policy violates the Fifth Amendment’s equal protection guarantee, as it did “not serve an important governmental interest that is exceedingly persuasive” and “the discriminatory means employed are not substantially related to the achievement of those objectives.” The court declined to reach the other constitutional and statutory claims, finding that the equal protection claim was sufficient to grant the injunction. Five days earlier, the 1st U.S. Circuit Court of Appeals also upheld a Massachusetts district court injunction barring the Department of State from enforcing the policy.

DOJ Sues Illinois Over In-State Tuition for Undocumented Students

On September 2, the Department of Justice (DOJ) filed a lawsuit claiming that Illinois’ policy allowing undocumented students to pay in-state tuition at public colleges and universities is unlawful. Illinois is the fifth state the DOJ has sued for having such a policy; Texas and Oklahoma both agreed to end their policies in consent judgments that quickly closed the cases, while cases in Kentucky and Minnesota are still pending.

Federal Union Sues Trump Administration Over Anti-Collective Bargaining EOs

On September 3, the National Treasury Employees Union filed a lawsuit that seeks to block two EOs purporting to strip federal employees in the U.S. Patent and Trademark Office of their collective bargaining rights. The Union argues that federal law expressly protects these rights, subject to a statutory national security exception that does not apply, and the EOs’ reliance on the exception is a pretext for retaliation against the Union for First Amendment-protected speech.

District Judge Slams DOJ’s Mishandling of D.C. Prosecutions Under Trump

On September 4, D.D.C. Magistrate Judge Zia Faruqui sharply criticized DOJ’s handling of criminal cases during the federal takeover of Washington, D.C. At a hearing, he warned that the nation is “past the point of constitutional crisis,” likening the Administration’s actions to “playing cops and robbers, like children.” Faruqui condemned DOJ’s repeated “misfires” in its attempt to prosecute people in D.C., saying it operates under a “we’ll arrest people… then see what happens” approach, resulting in multiple failed indictments.

Recent Executive Actions Impacting Education

Moving Adult Education Programs from ED to DOL

On September 8, in its latest step towards dismantling the Department of Education, the Trump Administration announced the creation of a new integrated “state plan portal” that will allow the Department of Labor (DOL) and ED to jointly administer adult education programs created by the Workforce Innovation and Opportunity Act (WIOA). The funding and staffing for these programs will be transferred to DOL under an Interagency Agreement (IAA) signed by both Departments on May 21. Experts in higher education and career and technical education have warned that shifting WIOA programs to DOL will reduce their quality, introduce confusion, and further diminish ED.

Is it Legal?

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WIOA directs the Secretary of Education to administer the adult education programs it creates and does not authorize the Secretary to transfer that responsibility to another federal agency. In addition, Congress annually funds the WIOA programs through appropriations to ED and does not authorize ED to transfer that money. The IAA, and steps like the portal to implement it, violate these statutes.

Proposing Four-Year Cap on International Student Visas

On August 28, DHS published a proposed rule that would limit F-1 and J-visas held by international students, short-term educators, and researchers to four years and require F-1 and J-visa holders to seek extensions and undergo “regular assessments” by DHS to remain beyond the four-year cap. Currently, F-1 and J-visa holders can remain for the duration of their studies, a policy especially important for doctoral candidates whose programs often exceed four years. Public comment on the proposed rule is open until September 29.

Is it Legal?

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This proposed rule dramatically increases government oversight of decisions typically left to school officials and would force international students to comply with burdensome reapplication and reporting requirements. Nonetheless, the Administration likely has some legal authority to define the length of nonimmigrants’ stay in the U.S., if DHS complies with the procedural requirements to change its policy and provides a well-reasoned explanation for the change.

With the new federal fiscal year starting on October 1, the Trump Administration is blocking the distribution of more than $410 billion in Congressionally appropriated funding, including over $2.3 billion in education funding. Reports indicate that ED has unlawfully withheld funds owed to recipients of grants under multiple programs, including programs to fund magnet schools, strengthen parent-school engagement, expand parent and family education regarding rights under the IDEA, and train educators to support English learners and students with visual and hearing impairments. ED has targeted for cancellation and withholding programs and grants alleged to promote disfavored “DEI activities” the Administration considers unlawful, including:

In addition, Congressional Democrats report that ED has frozen or cancelled over $1.3 billion appropriated to fund grants and contracts that the Administration terminated earlier this year without announcing any plans to recompete or otherwise use the money as intended by Congress.

Is it Legal?

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The President and his subordinate agencies do not have authority under the Constitution or statute to refuse to spend (“impound”) congressionally appropriated funds. The Impoundment Control Act (ICA) gives the President a very limited power to ask Congress to cancel appropriations; these proposed “rescissions” become final only if Congress passes a new law approving them. Some officials have suggested that Trump can simply not spend appropriated funds before they expire on September 30, a so-called “pocket rescission.” But the ICA does not authorize “pocket rescissions.” Unless Congress passes a law approving a proposed rescission before September 30, ED must distribute the funds as directed by Congress. Yet to date, Trump has not asked Congress to rescind any education funding. In addition, ED has not initiated the required termination process, including notice, investigation, and a hearing, to cancel or discontinue individual grants. Recent decisions have narrowed potential legal challenges to impoundments and grant cancellations. A D.C. Circuit panel held that private litigants cannot enforce the ICA but may be able to challenge some withholdings under the Administrative Procedure Act. Decisions related to grant terminations, including a Supreme Court shadow docket order, have called into question district courts’ jurisdiction to hear funding recipients’ claims for payment under existing awards. And just this week, Chief Justice Roberts, acting alone, issued an emergency stay allowing the continued withholding of $4 billion in international aid that a lower court found to be unlawfully impounded until the Supreme Court resolves the case.

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August 26, 2025

Recent Executive Actions Impacting Education

Restricting Federal Funding for Virginia Schools Districts Over Trans-Inclusive Policies

On August 19, the Department of Education (ED) placed five large Northern Virginia school districts on high-risk status (limiting their federal funding to reimbursement only) and is pursuing administrative proceedings to suspend or terminate their federal funding altogether. ED announced last month that the five districts violated Title IX by allowing transgender students to use restrooms and locker rooms that align with their gender identity. Virginia’s Republican governor and attorney general have sided with ED’s position, while the districts have pointed out that they are legally obligated to provide such access under binding 4th Circuit law.

Is it Legal?

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As NEA explained in this guidance, under existing legal precedent, Title IX protections should be understood to extend to trans students. ED cannot change Title IX or overrule court decisions interpreting it, including a 2015 decision by the U.S. Court of Appeals for the 4th Circuit that a Virginia school district violated Title IX by prohibiting a trans student from using the restroom that aligned with his gender identity. While ED generally has the authority to place grantees who have violated federal law on high-risk monitoring and to initiate termination proceedings, those remedies are not available without well-founded evidence of an actual violation.

Scaling Back Data Collection for Minoritized Populations

On August 22, the Department of Education published a notice in the Federal Register proposing to remove a requirement for states to track and report racial disparities in special education as part of their annual IDEA funding applications. ED also published a notice earlier this month that proposed dropping questions on transgender and nonbinary students from the Civil Rights Data Collection (CRDC), including whether they face harassment or whether districts have policies to prevent it. These changes would take effect in the 2025-26 and 2027-28 administrations of the CRDC, a mandatory survey of all public school districts that has been conducted for nearly 60 years.

Is it Legal?

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Changes to ED’s data requirements on race and gender identity do not alter states’ and districts’ legal obligations toward students of color and trans or nonbinary students. IDEA requires states to collect data on racial “significant disproportionality” in special education and revise policies on identification, placement, and discipline to reduce it — regardless of whether this data is included in their IDEA application. Likewise, eliminating questions on trans and nonbinary students from the CRDC does not eliminate states’ and districts’ duty not to discriminate against these students under Title IX and other civil rights laws.

Demanding States Remove “Gender Ideology” from Sex Education Materials

On August 26, the Department of Health and Human Services (HHS) demanded that 46 states and territories remove all references to “gender ideology” from their federally funded sex education materials within 60 days, or risk losing federal funding. The threat of withholding more than $81 million from states’ sex education program funding comes after HHS terminated California’s Personal Responsibility Education Program (PREP) grant on August 21, since the state refused to comply with HHS’s demand to alter its educational materials.

Is it Legal?

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HHS’s demands attempt to retroactively introduce a new condition on states’ receipt of sex education program funding. The Constitution’s Spending Clause prohibits the President, and executive agencies, from adding new conditions to existing grants and from creating new conditions for future grantees without an act of Congress. In addition, federal agencies can only terminate grants on the grounds that grantees’ use of them is inconsistent with agency priorities if that provision is included in the grant terms and conditions grantees receive at the start of an award. These threats of withholding, and the California termination, are unlawful.

Continued Funding Delays for Congressionally Mandated Programs

Throughout August, multiple programs supporting foreign and exchange students have reported delays or cancellations in the disbursement of their Congressionally appropriated funds. The Office of Management and Budget (OMB) has yet to distribute $60 million for National Resource Centers and Foreign Language and Area Studies fellowships, programs formerly under ED’s now-dissolved International and Foreign Language Education Office. OMB also recently cut approximately $100 million in FY 2025 funding for at least 22 State Department exchange programs, including the Global Undergraduate Exchange Program, the IDEAS Program, and the J. Christopher Stevens Virtual Exchange Initiative.

Is this Legal?

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OMB is required by statute to distribute appropriated funds to agencies within 30 days of enactment. Since funding for these programs was appropriated in a March 15th continuing resolution, OMB should have apportioned it by April 14. The President cannot refuse to spend appropriated funds as Congress intended. However, recent decisions by the U.S. Supreme Court and D.C. Circuit Court of Appeals have made it harder for private parties to challenge grant terminations, impoundments, and other withholdings of federal funds, although Congress and the Government Accountability Office could take steps to require the release of the money.

Limiting Employer Eligibility for Public Service Loan Forgiveness Program

On August 18, Department of Education issued a Notice of Proposed Rulemaking that would narrow employer eligibility for the Public Service Loan Forgiveness (PSLF) program. Employers could be disqualified if they engage in activities the Secretary of Education deems to have a “substantial illegal purpose,” such as providing gender-affirming care, running DEI programs, supporting “terrorists,” or assisting undocumented immigrants. Schools and universities are among the organizations most likely to have their eligibility jeopardized. Public comment is open until September 17; if the rule is finalized, it would take effect July 1, 2026. PSLF credit earned before then would remain protected.

Is this Legal?

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The proposed rule suffers from two main legal flaws. First, its potential “illegal activities” are not in fact illegal but reflect viewpoints with which the Trump Administration disagrees. The First Amendment prohibits the government from discriminating against its political opponents or others expressing disfavored viewpoints by blocking them from participating in federal programs. Second, the proposed rule is contrary to the statutory provisions creating PSLF, which define a “qualifying employer” to include a host of federal, state, and local government entities and any certified 501(c)(3) nonprofit. ED does not have the authority to narrow or modify this statutory category. ED can still revise the rule before it is finalized, but as written, these changes would likely be challenged in court.

Litigation Updates

NEA Win: District Judge Blocks Anti-Union Executive Order

On August 14, a D.C. district judge issued a preliminary injunction blocking a March EO that aims to strip collective bargaining rights from most federal unions. The lawsuit, filed by NEA on behalf of the Federal Education Association and other federal educator unions, challenged the EO as applied to educators in Department of Defense (DoDEA) schools on the ground that it violated the First and Fifth Amendment rights of educators and their unions, as well as an abuse of authority. The court determined that the plaintiffs were likely to succeed on their claim that the order was an “overly broad interpretation” of Trump’s authority to exclude agencies whose work relates primarily to national security from federal labor relations laws and found that the plaintiffs would suffer irreparable harm without the injunction.

SCOTUS Allows NIH Grant Cuts to Proceed

On August 21, the U.S. Supreme Court issued a 4-1-4 shadow docket order allowing the National Institutes of Health (NIH) to terminate nearly $800 million in grants that allegedly mentioned DEI goals, gender identity, COVID-19, or other topics disfavored by the Trump Administration. The order paused in part a Massachusetts district court’s June decision which found the grant terminations unlawful and ordered the Trump Administration to reinstate the awards. Justice Barrett, writing for herself, provided the controlling analysis: district courts “lack jurisdiction to hear challenges to grant terminations, which belong in the Court of Federal Claims,” but may hear challenges to agency guidance and other documents setting grant priorities under the Administrative Procedure Act.

District Judge Allows Dismantling of ED to Continue

On August 19, a Maryland district judge denied NEA’s request for a preliminary injunction in its lawsuit over the dismantling of ED. The judge cited unresolved legal questions raised by the U.S. Supreme Court’s shadow docket orders staying preliminary injunctions in New York v. McMahon and California v. Department of Education, which challenged the mass layoffs at ED and the mass termination of teacher preparation grants, respectively. Applying the 4th Circuit’s new heightened standard for emergency relief, the judge found the plaintiffs had not shown a clear likelihood of success on each of the dispositive issues in the case. She did not evaluate the merits or the government’s jurisdictional arguments directly, reasoning that the SCOTUS stays impeded such a showing. Consequently, the judge denied the plaintiffs’ motion for a preliminary injunction and the government’s motion to dismiss without prejudice. The government has 30 days to refile its motion to dismiss.

District Judge Orders ED to Reinstate OCR Staff

On August 13, a Massachusetts district judge refused the Trump Administration’s request to vacate a preliminary injunction that prohibits ED from laying off nearly half its Office for Civil Rights (OCR) staff. The order stemmed from an April lawsuit (brought by the Victim Rights Law Center) challenging only OCR terminations. The Administration sought to overturn the order after the U.S. Supreme Court blocked another, broader order in New York v. McMahon that directed ED to restore all laid-off staff across the agency. However, the judge concluded that the cases, and therefore their related rulings, are separate, since this case more specifically addresses the RIF at OCR and how it will prevent the office from carrying out its statutory mandate of protecting students from discrimination.

District Judge Blocks ED's Anti-DEI Orders

On August 14, a Maryland district judge found that ED’s February 14 Dear Colleague Letter and Certification Requirement, which attempted to ban initiatives to promote DEI at the state and district levels, were unlawful. In an opinion partially granting plaintiffs AFT and the American Sociological Association’s motion for summary judgment, the court addresses the process through which the Trump Administration tried to ban DEI, rather than the legality of the attempt to ban DEI itself. The plaintiffs had won a preliminary injunction in April that blocked parts of Trump’s anti-DEI policy. NEA also obtained a preliminary injunction barring implementation of the Letter and the Certification Requirement. Its motion for summary judgment in that case remains pending.

District Judge Orders ED to Restore Some Education Research Programs

On August 15, a Maryland district judge ruled that the Trump Administration violated federal law and the Constitution’s separation of powers by effectively shuttering ED's Comprehensive Centers and Regional Educational Laboratories programs. ED must restore the grants and contracts that fund these two sets of centers, which help state education departments and schools identify and implement evidence-based improvement strategies. The case was brought by two contractors involved in the programs, who sued over the abrupt cancellations of their contracts in February.

District Judge Allows Texas to End In-State Tuition for Undocumented Students

On August 16, a Texas district judge denied two motions to intervene in a case brought by DOJ, claiming that Texas’s policy allowing undocumented students to pay in-state tuition is unlawful. The two groups of intervenors (Students for Affordable Tuition and a coalition that includes a University of North Texas student, La Unión del Pueblo Entero, and Austin Community College) sought to defend the policy against the state’s decision to agree with DOJ’s position and request that the court find the policy unenforceable. The judge found that the intervenors filed their respective motions too late and lacked authority to defend the law, which he said rests exclusively with the Texas Attorney General's Office. Both groups have both appealed.

Appeals Court Upholds Block on University of California Federal Grant Terminations

On August 21, the 9th Circuit denied the Trump Administration's request to stay a California district judge's preliminary injunction blocking the Administration from terminating the University of California’s federal research grants across multiple agencies. The district court had issued an order on August 12 requiring the Administration to reinstate grants issued to UCLA researchers, ruling that the Administration’s “suspension” of the grants was “termination by another name” and violated an earlier preliminary injunction against terminating such grants.

DOJ Abandons Defense of Hispanic-Serving Institution Program Criteria

The Department of Justice (DOJ) said it will not defend against a lawsuit claiming that the eligibility criteria for colleges and universities seeking funds through ED’s Hispanic-Serving Institutions (HSI) grant program — which require that an institution’s enrollment consist of at least 25% Hispanic undergraduates — is unconstitutional. The plaintiffs in the case, the state of Tennessee and Students for Fair Admission, seek to have this so-called “ethnic target” invalidated and to ban ED from using it to determine the eligibility of Tennessee’s higher education institutions for HSI funding. The Hispanic Association of Colleges and Universities has filed a motion to intervene in the case.


 

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August 14, 2025

Recent Executive Actions Impacting Education

Ordering Colleges and Universities to Provide Data on Race in Admissions

On August 7th, Trump issued a memorandum directing Secretary of Education Linda McMahon to require colleges and universities to submit data to the Department of Education (ED) verifying that they are not unlawfully considering race in admissions decisions. McMahon has said that to comply with the memorandum, ED will update the Integrated Postsecondary Education Data System (IPEDS) to collect this information and will “increase accuracy checks,” penalizing institutions for late, incomplete, or inaccurate submissions. Institutions must now report race- and sex-disaggregated data for undergraduate applicants, admitted students, and enrollees — as well as for certain graduate and professional programs — including test scores, GPAs, first-generation status, graduation rates, and financial aid. ED will audit institutions to ensure consistency and accuracy in reporting.

Is this Legal?

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The Higher Education Act requires that colleges and universities complete IPEDS surveys as a condition of their participation in federal student financial aid programs, and allows the Secretary to decide what data to collect. To the extent ED uses data on consideration of race in admissions processes as the basis for claiming that institutions’ admissions policies violate Title VI, their interpretation of Title VI as prohibiting any consideration of race is contrary to longstanding precedent. While the Supreme Court has said that race-conscious admissions policies are impermissible, policies that use race-neutral means to advance racial diversity and related goals remain legal, and the Administration cannot change that rule through enforcement actions.

Giving Political Appointees Control Over All Federal Research Grants

On August 7th, Trump signed an EO granting political appointees power over the distribution of billions of dollars in federal research grants. The EO requires all federal agencies — including FEMA, the National Science Foundation (NSF), and the National Institutes of Health — to appoint officials to review funding opportunities so that they “are consistent with agency priorities and the national interest.” Agencies must allow grants to be terminated at any time, give preference to institutions with lower indirect cost rates (all else equal), and halt new funding announcements until the new protocols are implemented.

Is this Legal?

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The EO purports to require grant applicants to explain how their proposals advance the President’s policies and to prohibit the use of grant funds for activities that are related to DEI, acknowledge the existence of trans and nonbinary people, or promote “anti-American values,” among other things. These demands violate the First Amendment by compelling recipients’ speech and penalizing particular viewpoints; are unconstitutionally vague; and violate the Constitution’s Spending Clause, which prohibits the President from adding new conditions to existing grants and from creating new conditions for future grantees without an act of Congress. In addition, federal agencies can only terminate grants that are inconsistent with agency priorities if that provision is included in the grant terms and conditions grantees receive at the start of an award. The EO’s proposal, to make termination based on agency priorities available retrospectively, is unlawful.

Initiating Settlements with Higher Education Institutions

Two new higher education institutions have agreed to settle or initiated settlement discussions with the Trump Administration following investigations into alleged violations of federal civil rights law. On August 1st, ED reached a resolution agreement with Wagner College over alleged Title IX violations related to its trans-inclusive athletics policy. Wagner will reverse the policy, adopt “biology-based” definitions of “male” and “female,” and issue apologies to all cisgender athletes who have competed alongside transgender athletes. On August 7th, the University of California (UC) system began negotiations with the Administration after the Department of Justice (DOJ) issued a notice alleging that the University of California, Los Angeles (UCLA) violated Title VI due by failing to respond to alleged antisemitism. UC seeks to restore $584 million in suspended funding, while the Administration is seeking a $1 billion settlement and the creation of a $172 million fund for victims of civil rights violations.

Is this Legal?

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Using the threat of withholding federal funding to coerce private entities into compliance with the Trump Administration’s agenda raises serious First Amendment concerns. The First Amendment prohibits the government from punishing or chilling speech and expression that adopts a disfavored or dissenting viewpoint. Freezing research dollars to force universities to adopt certain policies violates this principle. Litigation on this issue is ongoing. A widely criticized decision by a federal judge in New York dismissed a challenge to the cancellation of Columbia’s research funding brought by unions representing faculty and graduate students for lack of standing. On August 12th, a California district judge ordered the NSF to restore over $101 million in suspended federal grants to UCLA, stating that it was in violation of a preliminary injunction on science grant terminations that the court handed down in June. And a Massachusetts judge’s ruling on Harvard University’s similar claims is expected in the coming weeks.

Failing to Resolve Thousands of Student Loan Complaints

In a July 21st letter to Senator Elizabeth Warren, ED disclosed that its Federal Student Aid (FSA) Ombudsman Office has a backlog of 27,000 complaints involving problems with student loan processing, repayments, and financial aid scams. A former FSA employee reported in a court filing that there were 16,000 complaints already pending when the Trump Administration began widespread layoffs at ED last March, cutting the office’s staff from 63 to 25. In May — the most recent month with available data — the office closed just over 1,100 complaints, leaving thousands more unresolved in an unprecedented backlog.

Is this Legal?

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FSA’s Ombudsman’s Office was created by statute and is required to “provide timely assistance to borrowers.” A lawsuit brought by NEA, NAACP, and other partners challenges the dismantling of ED on the grounds that the President cannot prevent ED from carrying out its mandatory statutory responsibilities (including timely resolution of borrower complaints) by eliminating the resources necessary for it to do so. Congress has also signaled its disapproval of the Administration’s gutting of ED: the Senate committee responsible for ED appropriations voted by an overwhelming bipartisan majority to advance a bill that would reject all of Trump’s proposed education budget cuts; require ED to maintain staffing necessary for executing tasks required by law; and prohibit ED from offloading core functions to other agencies.

Waiving ESEA Requirements for Certain States

On July 29th, ED sent a Dear Colleague Letter to all chief state school officers encouraging them to seek waivers from Elementary and Secondary Education Act (ESEA) requirements. The letter argues that Secretary McMahon has the authority “to waive any statutory or regulatory requirement” under the ESEA, with a handful of exceptions. ED claims that “provid[ing] state leaders more discretion over federal programs" and removing “bureaucratic red tape” will empower states to improve their National Assessment of Educational Progress (NAEP) math and reading scores. Twelve states had previously written to McMahon urging ED to issue state waivers and allow block grants; Indiana, for instance, plans to seek exemptions from requirements related to state assessments, education of migrant children, prevention and intervention programs for at-risk youth, English Language Acquisition instruction, and academic enrichment programs in favor of literacy, STEM, and high school redesign initiatives.

Is this Legal?

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While the ESEA gives the Secretary relatively broad authority to waive statutory and regulatory requirements, the statute creates important legal limits on her ability to grant waiver requests. For example, the Secretary cannot change the allocation or distribution of federal formula grants to states, school districts, or other recipients; most statutory limits on permissible uses of federal formula funds; applicable civil rights requirements; or the provisions banning states and school districts from using ESEA awards to fund religious worship and instruction. States’ requests for waivers that would allow them to consolidate all ESEA funding into a single block grant without any transparency or accountability measures fall within these restrictions. A decision by the Secretary to grant these waivers would be unlawful.

Litigation Updates

NEA-NH and Coalition Sue New Hampshire Over Divisive Concepts Law

On August 7th, NEA-New Hampshire (along with a coalition of school districts and civil rights advocates) filed a lawsuit challenging a recently enacted New Hampshire law that bans “any DEl-related initiatives, programs, training, or policies” in any schools that receive public funding, as well as in any other “public entity,” which would include colleges, police departments, and libraries. According to the law, unlawful DEI is any program or policy that “classifies individuals based on race, sex, ethnicity, or other group characteristics for the purpose of achieving demographic outcomes, rather than treating individuals equally under the law.” The lawsuit alleges that the law violates the First Amendment rights of educators and students, is preempted by federal civil rights laws protecting students with disabilities, and is impermissibly vague under the Fourteenth Amendment.

DOJ Wins Case Blocking Oklahoma In-State Tuition Policy for Undocumented Students

On August 5th, the DOJ filed a lawsuit against Oklahoma challenging a state policy that allows undocumented students to pay in-state tuition at public colleges and universities. Oklahoma officials filed a joint motion siding with the federal government, and on August 7th, an Oklahoma district judge granted the joint motion for a consent judgment striking down the policy. Oklahoma is the fourth state the DOJ has sued for having such a policy; like Oklahoma, Texas agreed to a consent judgment that quickly ended its policy back in June, while cases in Kentucky and Minnesota are still pending.

District Judge Allows NSF Grant Cuts to Proceed

On August 1st, a New York district judge refused to grant a preliminary injunction that would block two directives issued by NSF (one which ends efforts to promote minority inclusion in STEM education and one which caps indirect cost reimbursement rates for research grants). While the lawsuit, which was brought by 16 states, argues that these directives violate the Administrative Procedure Act (APA) and are arbitrary and capricious, the judge decided that the court likely lacks subject matter jurisdiction.

DC Circuit Court Rules that Private Parties Cannot Challenge Impoundments

On August 13th, in a 2-1 decision, the U.S. Court of Appeals for the D.C. Circuit overruled a lower court's preliminary injunction that blocked the Trump Administration from cutting USAID grants for which Congress appropriated funds last year. The court did not rule on the constitutionality of the grant terminations; rather, the ruling declares that only the Comptroller General of the U.S. Government Accountability Office (not private parties like the plaintiff nonprofits) has a cause of action to challenge the withholding of funds.

Students File Lawsuit Over Attempted Deportation of Student Visa Holders

On August 6th, the Foundation for Individual Rights and Expression filed a lawsuit against the Trump Administration alleging that its attempts to deport student visa holders alleged to have engaged in “anti-American or anti-Israel” speech violates the First and Fifth Amendments. The lawsuit was filed on behalf of Stanford University’s student newspaper and two unnamed plaintiffs on student visas. The lawsuit asks the court to block the State Department from making the plaintiffs eligible for deportation and the Department of Homeland Security from initiating deportation proceedings based on the students’ speech.

State Coalition Files Lawsuit Over EO Banning Gender Affirming Care for Minors

On August 1st, a coalition of 16 states and the District of Columbia filed a lawsuit against the Trump Administration over its January EO that attempts to eliminate the provision of gender-affirming care to individuals under the age of 19. The lawsuit argues that the Administration’s actions violate the Tenth Amendment and the Administrative Procedure Act, and seeks to vacate and enjoin the EO and DOJ’s subsequent memoranda implementing it.

Appeals Court Reinstates Trump EO Terminating Federal Collective Bargaining Rights

On August 1st, the U.S. Court of Appeals for the Ninth Circuit unanimously stayed a lower court’s preliminary injunction that had blocked the March EO eliminating collective bargaining rights for several federal unions. The court found the Trump Administration likely to prevail on plaintiffs’ claim of retaliation, noting that the order is not retaliatory on its face and that “the president would have taken the same action” regardless of any retaliatory motive to target the plaintiffs. Even if some retaliatory intent existed, the court said the Administration likely justified the EO on national security grounds. A ruling granting a preliminary injunction in NEA’s lawsuit challenging the EO (which was filed on behalf of the Federal Education Association and other unions representing educators employed by the federal government) is expected on August 14th.


 

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July 31, 2025

Recent Executive Actions Impacting Education

Issuing a Department of Justice Memo Declaring DEI Practices Unlawful

On July 29, the Department of Justice (DOJ) issued a guidance memo expressing DOJ’s view that federal funding recipients who engage in diversity, equity, and inclusion (DEI) practices violate civil rights laws and can be penalized. Examples of the types of initiatives that DOJ now considers “unlawful” include scholarships available exclusively to underrepresented minority communities; facilities restricted to members of certain racial or ethnic groups; recruitment targeting specific geographic areas based on demography; training sessions that separate participants into groups based on racial or ethnic identity; the use of criteria like “cultural competence,” “lived experience,” or “cross-cultural skills” in hiring; and requirements that job applicants provide diversity statements. The memo encourages federal agencies to review their existing programs and funding recipients to ensure compliance with this understanding of the civil rights laws.

Is this Legal?

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The memo does not affect the legality of DEI initiatives. Longstanding precedent establishes that well-designed and properly implemented initiatives to promote DEI are lawful as long as they do not give competitive preferences to individuals based on protected characteristics like race or sex. DOJ cannot change the statutes or the courts’ interpretation of them. DOJ admits that the memo is “non-binding” and does not create “mandatory requirements” for agencies or funding recipients.

Ordering Virginia School Districts to Rescind Trans-Inclusive Policies

On July 25, the Department of Education (ED) announced that it has found five Northern Virginia school districts in violation of Title IX for their policies allowing trans students to use facilities that align with their gender identity. School officials must rescind the policies, issue memoranda explaining that district policies should align with ED’s view of Title IX, and adopt “biology-based definitions of the words ‘male’ and ‘female.’” The five districts have until August 4 to comply or risk referral to DOJ for civil enforcement proceedings.

Is this Legal?

As NEA explained in this guidance, under existing legal precedent, Title IX protections should be understood to extend to transgender students. ED cannot change Title IX or overrule court decisions interpreting it. The Supreme Court granted certiorari in two cases presenting the question of whether laws and policies excluding trans women and girls from participating in women’s and girls’ sports teams violate the Equal Protection Clause. A decision is expected by June 2026.

Releasing Billions in Withheld Education Funding

ED has reversed its June 30 withholding of $6.8 billion in congressionally appropriated grant funding under the Elementary and Secondary Education Act (ESEA) and other laws that are typically disbursed to states on July 1. The agency first released $1.4 billion of the withheld funds for before- and after-school and summer programs, and then, on July 25, announced that it would release an additional $5 billion appropriated for migrant students, professional development, English learners, and academic enrichment as well as $715 million for two adult education programs. ED still plans to withhold $52 million allocated for two higher education programs that support migrant students.

Is this Legal?

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The president must spend money appropriated by Congress to implement the federal programs and activities for which the funds are appropriated and distribute the funds in the manner directed by Congress. Three lawsuits (including one brought by NEA in coalition with other plaintiffs; a group of 24 states; and a coalition of school districts, educator unions, and nonprofits), challenged this illegal move under the Constitution, the Administrative Procedure Act, the ESEA, and other statutes and are still pending.

Reaching Resolution Agreements with Columbia and Brown Universities

On July 23, the Department of Education announced that it had reached a resolution agreement with Columbia University to unfreeze $400 million in federal research funds in exchange for various concessions. In addition to codifying changes that the University introduced in a March agreement, Columbia will pay $200 million to the federal government, eliminate DEI programs, end the use of “personal statements [and] diversity narratives” in admissions and hiring, provide the federal government with student visa-holders' disciplinary records, and “reduce its financial dependence” on international students. On July 30, ED announced a similar agreement with Brown University that will restore $510 million in frozen federal research funds. Brown has agreed to pay $50 million to local workforce development organizations, adopt “biology-based” definitions of “male” and “female,” prohibit trans women from using female athletic facilities, provide information about university complaints alleging national-origin discrimination to the federal government, and end DEI programs.

Is this Legal?

Legal Icon
Using the threat of withholding federal funding to coerce private entities into compliance with the Trump Administration’s agenda raises serious First Amendment concerns. The First Amendment prohibits the government from punishing or chilling speech and expression that adopts a disfavored or dissenting viewpoint. Freezing research dollars to force universities to adopt certain policies and positions plainly violates this principle. Litigation on this issue is ongoing. A widely criticized decision by a federal judge in New York dismissed a challenge to the cancellation of Columbia’s research funding brought by unions representing faculty and graduate students for lack of standing. The unions have appealed. A Massachusetts judge’s ruling on Harvard University’s similar claims, that the Administration unconstitutionally terminated its federal funding, is expected in the coming weeks.

Pausing Student Loan Income-Based Repayment Plan

The Washington Post reports that ED has paused the Income-Based Repayment (IBR) Plan, which forgives borrowers’ federal student loans after 20 or 25 years of payments depending on their monthly earnings and family size. IBR is the only one of four income-driven federal student loan repayment plans not enjoined as part of the legal challenges to the SAVE repayment program. ED claims the pause is necessary to bring its income-driven repayment systems into compliance with the court order, but has not said when the pause began or when it will end.

Is this Legal?

IBR is the only income-driven repayment plan mandated by the Higher Education Act (HEA), the statute that governs federal student financial aid. Under the law, ED must operate IBR, but the HEA does not specifically permit or prohibit ED from pausing IBR for administrative reasons. A lengthy pause that effectively prevents qualified borrowers from obtaining forgiveness would likely violate the HEA and the Administrative Procedure Act.

Litigation Updates

Massachusetts Judge Dismisses Class Action Suit Over Educator Strike

On July 18, a Massachusetts Superior Court judge dismissed a multi-million-dollar class action stemming from the Newton Teachers Association (NTA)’s 2024 strike. The case was brought by local parents against NTA, the Massachusetts Teachers Association, NEA, and the United Auto Workers. The judge dismissed their claims in full, finding that the state public-sector bargaining law does not create a private right of action for third parties to enforce its strike ban and impliedly preempted the parents’ other tort, contract, and statutory claims. The opinion is the latest in a string of rulings rejecting similar claims brought by parents in Kentucky, Illinois, and Oregon.

Religious Coalition Sue DHS Over End of Sensitive Locations Policy

On July 28, a coalition of religious organizations filed a lawsuit challenging the Department of Homeland Security (DHS)’s rescission of prior guidelines that restricted immigration enforcement at “sensitive locations,” including schools and churches. The plaintiffs allege the new policy violates the First Amendment, the Religious Freedom Restoration Act, and the Administrative Procedure Act.

State Coalition Sues Trump Administration Over Restrictions to Federal Programs

On July 21, 20 states and the District of Columbia filed a lawsuit challenging decisions by ED, HHS, DOJ, and DOL to reclassify more than a dozen federally funded programs as “federal public benefits” unavailable to undocumented immigrants under federal law. The policies prevent undocumented individuals from accessing Head Start, workforce development grants, dual enrollment for high school students, and other programs. The agencies agreed to pause enforcement in the plaintiff states and District of Columbia until September 4, while the court considers the states’ motion for a preliminary injunction.

District Judge Rules DOD Indirect Reimbursement Rate Policy Unlawful

On July 18, a Massachusetts district court judge preliminarily enjoined the Department of Defense (DOD) from implementing a 15% cap on indirect cost reimbursements for higher education institutions. Noting this was the “fourth time” the Administration has attempted “to announce a policy that has consistently been deemed unlawful” by courts blocking indirect cost caps at other agencies, the court ordered DOD not to reject or treat adversely grants negotiated at a rate above 15%.

District Judge Dismisses Lawsuit Over Terminated School Mental Health Grants

On July 18, a New Mexico district court judge dismissed a school district’s lawsuit to restore a $6 million grant awarded by ED to support school-based mental health services. ED announced in April that it would discontinue more than 200 such grants, effective December 31, 2025. In dismissing the case and denying the district’s request for a preliminary injunction, the court found the grant program “is a worthwhile expenditure of taxpayer funds” and “seems to be consistent with the statutory text” authorizing and funding it. But the judge determined that, under recent Supreme Court orders staying preliminary relief in cases raising similar grant termination claims, the district court lacked jurisdiction to hear the claims, which had to be brought in the Court of Federal Claims.

District Judge Rules NEH Grant Terminations Unlawful

On July 25, a New York district court judge granted a partial preliminary injunction blocking the National Endowment for the Humanities (NEH)’s cancellation of more than 1,000 grants, totaling over $175 million allegedly related to DEI, gender ideology, or “environmental justice.” The court ruled that the agency violated the First Amendment by cancelling the grants “based on the recipients’ perceived viewpoint, in an effort to drive such views out of the marketplace of ideas.”


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