Dive Brief:
- Despite a court order requiring the U.S. Department of Education to completely reinstate its previously canceled mental health grants, the agency only awarded recipients six months worth of funding rather than for a full year, according to states affected last year by the department's grant cancellations.
- Sixteen states sued the department after districts were abruptly notified in April 2025 of their grants being revoked because of diversity, equity and inclusion practices that the Trump administration said don't align with its priorities. Last month, the Education Department lost its appeal to the 9th U.S. Circuit Court of Appeals, which required the agency to make new decisions on whether to keep discontinuing recipients’ grants.
- However, the suing states say the department's decision to deny the districts a full year of grant funding will lead to the end of mental health initiatives funded by them. Some have already had to issue advanced layoff notices or forego graduate student internships at high-need schools, according to a court document filed by California on March 17.
Dive Insight:
The March 17 motion filed by California claiming the department's noncompliance with a previous court order is the latest in a nearly yearlong battle between states and the Education Department to secure federal funding for school mental health projects granted under the Biden administration.
In April 2025, the Trump administration canceled up to $1 billion in already-awarded, multi-year, congressionally approved funds under the School-Based Mental Health Services Grant Program and the Mental Health Service Professional Demonstration Grant.
After saying the canceled grants didn't align with its priorities, the Education Department issued new priorities in September, saying grant money may not be used for “promoting or endorsing gender ideology, political activism, racial stereotyping, or hostile environments for students of particular races.”
Under the new application process, the original awards revoked from districts and other entities were not restored.
In line with those new priorities, the department in December distributed more than $208 million in new grants despite being ordered earlier to reinstate its previously canceled awards.
Shortly after the agency distributed the new funds, a federal judge also in December ordered the permanent reinstatement of grants in 16 states and said their cancellations were unlawful. The order applied to about 50 school districts, colleges and nonprofit entities who received the grants in the plaintiff states.
The agency appealed that decision to the 9th Circuit, but the appeals court sided with states in a decision against the department last month.
Despite that decision, states in their new court document claim that the department only provided six months of funding, rather than a year's worth, as a "risk mitigation measure" related to "ongoing concerns regarding the financial stability and uncertainty about the continued operation of these grants while litigation is pending."
The department is also requiring recipients whose grants were canceled to submit a performance report by June 1, after which the department may "take further risk mitigation actions."
"Defendants make clear that they may decline to provide funding after June 1, effectively using this measure to shorten the budget period to six months and require grantees to receive a second, mid-year continuation decision," states in the court document filed March 17 said.
The Education Department did not respond to K-12 Dive’s request for comment in time for publication on Friday.
Recipients affected by the cancellations have claimed that the department can, according to its own regulations, only cancel grants based on the district's performance, and only after its first performance review in a multi-year grant period, which at the time of the cancellations last year, hadn't been submitted yet.
Since then, recipients have said the turbulence in funding has affected their ability to administer the programs effectively.
"Without the certainty of a full year of funding, some grantees will lose essential staff and will be unable to properly plan and budget for the fall semester," California's attorney general's office said in a press release March 18.
