Labor & Employment Law Daily Wrap Up, LITIGATION NEWS, TRENDS—Dozens of state attorneys general file suit over frozen education grant funds, (Jul 16, 2025)

By Brandi O. Brown, J.D.

They allege that the funding freeze immediately upended plans for the impending academic year; local education agencies had approved budgets, developed staffing plans, and signed contracts to provide services under the grants.

This week, a coalition of more than two dozen attorneys general and several states filed suit against the U.S. Department of Education and Secretary Linda McMahon, along with President Trump and multiple members of his administration, alleging that the administration has unlawfully frozen nearly seven billion dollars in Congressionally-appropriated education funding for K-12 schools and adult education, only weeks before the school year is set to start in many states.

Statutory and constitutional violations. They argue that the freeze violates federal funding statutes and regulations authorizing the impacted programs and appropriating funds for them. They also allege that the freeze violates federal statutes governing the federal budgeting process, including the Antideficiency Act and Impoundment Control Act, and violates the constitutional separation of powers doctrine and the Presentment Clause. Plaintiffs are seeking declaratory and injunctive relief.

Abruptly frozen… According to the states, they have complied with the funding conditions set forth under the law and have state plans that the Department of Education has already approved. They have received these funds, without incident, for decades, they argue. Nevertheless, this year, on June 30, state agencies across the country were notified that the Department of Education would not be “obligating funds for” six formula funding programs on July 1. Pursuant to federal statutory and regulatory requirements, they explain, each year the department makes 25 percent of the funds for these programs available to states on or about July 1, which allows state and local educational agencies to plan their budgets for the academic year ahead.

…just before the start of the school year. “With no rhyme or reason, the Trump Administration abruptly froze billions of dollars in education funding just weeks before the start of the school year,” said California Attorney General Rob Bonta. “In doing so, it has threatened the existence of programs that provide critical after school and summer learning opportunities, that teach English to students, and that provide educational technology to our classrooms.”

“[A]ssault on immigrant and working families.” “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 childcare 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.”

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