Key Points:
- A federal judge has extended a court order preventing the Trump administration from reclaiming over $1.1 billion in unspent COVID-related school aid.
- The Department of Education must continue funding processes and halt enforcement of a recent claim deadline.
- The lawsuit, spearheaded by Democratic-led states, argues the aid remains crucial for post-pandemic school recovery efforts.
A federal court in Manhattan has prolonged an injunction halting the Trump administration’s attempt to rescind unused pandemic financial aid for public schools, as a multi-state lawsuit challenging the move proceeds.
The decision, issued by U.S. District Judge Edgardo Ramos on Tuesday, extends his earlier ruling from May 6, preventing the U.S. Department of Education from withdrawing more than $1.1 billion in unspent funds allocated through the American Rescue Plan Act.
The judge’s latest order compels the department to continue processing all current and future state funding requests “without delay” and mandates a status update within 30 days. Additionally, it blocks enforcement of a May 11 directive that had given states a May 24 deadline to claim remaining funds.
State-Led Lawsuit Defends Pandemic Education Funds
New York Attorney General Letitia James, alongside attorneys general from 15 other states and Pennsylvania Governor Josh Shapiro—all Democrats—filed the lawsuit to stop the aid withdrawal. They argue that the decision would jeopardize vital programs still supporting schools recovering from the COVID-19 crisis.
The funds in question are part of a broader $190 billion relief initiative passed by Congress to assist K–12 schools in coping with the pandemic’s impact. These funds have supported tutoring programs, services for homeless students, and the modernization of school facilities.
Although the Biden administration had extended access to the funds through March 2026, Education Secretary Linda McMahon—appointed during the Trump administration—asserted in a March 28 letter that states had enough time to spend the money and that reallocating the unused funds would be more effective.
The Education Department also warned that distributing the funds during litigation could result in irreparable harm, as they would not be able to recover the money if the court eventually rules in their favor.
Unspent Millions at Stake as Legal Battle Continues
Before the lawsuit was filed, Maryland had the largest unspent balance at approximately $245.9 million, followed by New York with around $134.2 million. The lawsuit (New York et al v. U.S. Department of Education et al, No. 25-02990) is being heard in the U.S. District Court for the Southern District of New York.
As of now, the White House has not publicly responded to the court’s ruling. The case continues to draw national attention amid ongoing debates about pandemic-era spending and the federal government’s role in public education recovery efforts.