Multi-state lawsuit challenges $1B in federal education grant cuts

“The White House is treating children’s lives as disposable by bypassing court orders and unlawfully terminating these grants, but we will do whatever it takes to protect our kids and secure the funds they were promised,” Nessel said.

Michigan schools and universities are set to lose more than $6 million, while a total of $1 billion in funding is at risk for termination nationally by the end of July.

The funding was first approved by Congress to fund positions for 14,000 mental health professionals in schools throughout the nation.

When it first announced the cuts, the Department of Education said they were funded under the “deeply flawed priorities” of the Biden administration.

“These grants are intended to improve American students’ mental health by funding additional mental health professionals in schools and on campuses,” said Madi Biedermann, deputy assistant secretary for communications at the DOE. “Instead . . . grant recipients used the funding to implement race-based actions like recruiting quotas in ways that have nothing to do with mental health and could hurt the very students the grants are supposed to help.”

This is not the first lawsuit the federal government has faced over these proposed grant cuts.

In July 2025, just a few months after the department announced initial plans to discontinue the grants, Nessel joined a coalition of attorneys general in suing the department.

In December, the coalition secured a court order declaring the grant cancellations unlawful. The order required the department to reconsider its decisions and permanently barred it from implementing the discontinuations “through any means.”

“The department has admitted most of the grants should have been continued, but they have nonetheless engaged in an ongoing campaign to hinder, threaten, and ultimately try to eliminate the mental health grants in Michigan and the other coalition states,” Nessel’s office alleged in a statement.

Following the court order, the Department of Education reissued the grants and funding through the end of July. At the time, it said it would reconsider funding through the end of the year in June. Since then, it has since announced plans to terminate the grants.

This is all according to the lawsuit.

“The Department of Education persists in its illegal plan,” it said. “Defendants say they can do this because the Washington injunction enjoined ‘discontinuances,’ and now, the Department plans to ‘terminate’ the grants at issue. But though the precise mechanism by which the Department plans to end the protected grants may have changed, its illegality has not.”

The attorneys general are seeking a preliminary injunction to these terminations, stating they filed this second lawsuit “protectively.” They allege the termination of the grants violate both the Administrative Procedure Act and the U.S. Constitution.

"The federal government should always prioritize the well-being of our students,” Nessel said. “Instead, it insists on abandoning schools to combat the mental health crisis alone."

The attorneys general of Michigan, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, New Mexico, New York, Oregon, Rhode Island, Washington and Wisconsin have all signed onto the lawsuit – which was filed in the U.S. District Court, Western District of Washington at Seattle.

Nessel’s office applauded the “incredible success” of the grant program.

“In their first year, the programs provided mental and behavioral health services to nearly 775,000 elementary and secondary students nationwide,” it said. “Sampled projects showed real results: a 50% reduction in suicide risk at high-need schools, decreases in absenteeism and behavioral issues, and increases in positive student-staff engagement.”

The Department of Education did not respond to a request for comment.