Department of Education funding pause and DOJ guidance prompt lawsuits and state responses, attorney tells board

Richard Schwartz briefed trustees on federal actions earlier this summer that temporarily withheld education grant funds while the Department of Education reviewed whether certain programs advance what the administration called "diversity, equity and inclusion" or "gender ideology." The department initially withheld roughly $7 billion across seven programs; the district’s share was described in the briefing as about $185 million (a figure attributed to the department’s initial freeze). Trustees were told those funds were ultimately released to states by late July.

Nut graf: The district was briefed that the grant pause prompted multi‑state litigation, a shadow‑docket procedural stay at the U.S. Supreme Court, and new Justice Department guidance listing practices the federal government views as potentially unlawful in recipients of federal funding. Counsel said these developments created both practical uncertainty for federal grant administration and potential compliance obligations for local districts.

Schwartz traced the timeline: after the initial pause, 25 states including North Carolina sued; the Department of Education partially released funds within days and fully distributed the monies by month‑end. He explained that plaintiffs in a separate Massachusetts case had obtained a district court injunction constraining the department’s workforce reductions and office closures; the government appealed and the Supreme Court stayed that injunction through the emergency