States Sue Trump Administration Over Withheld $6.8 Billion in Education Funding

by Lawrence J. Tjan | Jul 14, 2025
A student walking through a school hallway with other students in the background. Photo Source: Adobe Stock Images

A coalition of 24 states and the District of Columbia filed a federal lawsuit against the Trump administration on Monday, seeking to compel the release of $6.8 billion in education funding withheld just weeks before the new school year.

The withheld funds constitute about 14 percent of all federal money allocated for elementary and secondary education nationwide. These funds typically support essential services such as free or low-cost after-school programs, teacher training initiatives, and specialized assistance for children learning English.

Attorneys general from 22 states, along with the Democratic governors of Pennsylvania and Kentucky, joined in the lawsuit filed in Rhode Island. The suit contends the administration's withholding of funds violates the Impoundment Control Act of 1974, which explicitly restricts a president from withholding congressionally appropriated funds.

The Impoundment Control Act of 1974 was enacted to reinforce congressional control over federal expenditures. It requires that once Congress appropriates funds, the president must distribute them as directed. If a president wishes to withhold or rescind funds, the Act mandates a formal notification to Congress, which then has 45 days to approve or deny the request. Without congressional approval, the funds must be released as appropriated.

The lawsuit specifically asks the federal court to mandate the immediate distribution of the withheld funds, originally scheduled for disbursement on July 1. Just one day prior, on June 30, the Department of Education informed states it would retain the funds pending an internal review. Administration officials cited preliminary findings alleging the misuse of federal education dollars for politically driven purposes.

In a statement, a spokesperson from the White House Office of Management and Budget (OMB) accused certain educational programs of using federal funds to support a "radical left-wing agenda," citing a seminar titled "queer resistance in the arts" as an example. The administration has not provided a timeline for completing its review or releasing the funds.

The Trump administration has frequently expressed intentions to reduce federal educational funding and consolidate or eliminate certain programs altogether. President Trump has also asserted the Impoundment Control Act itself is unconstitutional, advocating greater presidential authority over federal spending. Additionally, Trump has repeatedly called for the abolition of the Department of Education, proposing that educational oversight be transferred entirely to the states—a change only Congress can authorize.

Criticism of the administration’s actions has intensified across party lines. Rep. Mike Lawler, a Republican from New York, publicly urged President Trump to release $1.3 billion earmarked for after-school programs, emphasizing their critical role in supporting working parents and state autonomy.

According to the Afterschool Alliance, a national advocacy group, the withheld funding directly affects approximately 1.4 million children—nearly a fifth of all students enrolled in after-school programs. These students, predominantly from lower-income families, rely on federally funded programs for academic support, extracurricular enrichment, and nutritional assistance.

Of the withheld funds, $2.1 billion was designated specifically for initiatives aimed at training and retaining skilled teachers, particularly in low-income districts. Another $1.4 billion was flexible funding intended to support arts education, mental health services, physical education, and technology improvements.

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Lawrence J. Tjan
Lawrence J. Tjan
Lawrence is an attorney with experience in corporate and general business law, complemented by a background in law practice management. His litigation expertise spans complex issues such as antitrust, bad faith, and medical malpractice. On the transactional side, Lawrence has handled buy-sell agreements, Reg D disclosures, and stock option plans, bringing a practical and informed approach to each matter. Lawrence is the founder and CEO of Law Commentary.