Several states are urging U.S. Education Secretary Linda McMahon to immediately restore previously approved pandemic relief funding that the Education Department canceled last week, even as her agency doubles down on a new appeal process for states and districts to release funding for projects they, in many cases, have already started.
New York will pursue “legal redress” over the department’s “unilateral, unexplained reversal” if McMahon doesn’t withdraw the rule changes she announced on March 28, Daniel Morton-Bentley, the state’s deputy education commissioner, wrote in an email to McMahon on April 2.
Education chiefs in Kentucky, Mississippi, and North Carolina have also sent sharply worded letters to McMahon in the last week, emphasizing the potential for school districts to face disrupted services, halted projects, and legal battles with contractors if the original rules for spending pandemic relief money aren’t restored.
“These are not merely numbers on a spreadsheet; they represent critical services and supports that directly benefit our most vulnerable students,” Lance Evans, Mississippi’s education chief, wrote in a letter to McMahon on April 2. Mississippi has as much as $137 million tied up in the fresh confusion over late liquidation, Evans wrote.
Some districts have already stopped some services for students as the continuing federal funding chaos unfolds. The Baltimore school district announced Friday that tutoring and after-school programs that thousands of students attend will shut down next week. Sylvan Learning pulled federally funded tutors out of classrooms in upstate New York this week, including some who worked with students with disabilities. A Catholic school in Mississippi on Friday was poised to dismiss several employees whose salaries are funded with federal pandemic aid.
McMahon wrote to schools shortly after business hours ended on Friday, March 28, announcing that the department had abruptly canceled all extensions it had granted to allow states and schools more time to spend COVID relief funds from programs including ESSER (for public schools), EANS (for private schools), and HCY (for supporting homeless children). McMahon said states could request spending extensions for specific projects, but that its blanket extensions were no longer in effect.
On Thursday, the department sent a follow-up message to states outlining the new application process to get individual projects approved for extensions, or “late liquidation.”
States and districts had to allocate the last set of pandemic relief funds to particular expenses by Sept. 30, 2024, and then spend, or “liquidate,” them by Jan. 30, 2025.
But more than 40 states secured approval in 2024 and early 2025 to extend spending deadlines for local districts and state education agencies to March 28, 2026. These funds were largely allocated for vendor expenses such as construction, tutoring, and mental health services.
Some states got “late liquidation” approvals from the department as recently as last month, during the second Trump administration, though the process began during the Biden administration under Education Secretary Miguel Cardona.
In an interview with Education Week on April 3, Cardona said districts and states came to him while he was in charge with earnest requests for more time to spend money in ways that support students.
McMahon’s sudden policy shift “shows a clear lack of understanding of how our schools work and how our state systems work,” Cardona said. “To me, it’s another example of what happens when you’re not taking students into account, and their needs.”
Some states will pursue appeals, while others want the department to reconsider
Upon learning that the department had nixed late liquidation without warning, state education agencies leapt into action.
Maryland recommended that districts stop spending federal pandemic funds. Nebraska ordered state contractors to stop work immediately. North Dakota said it plans to lobby state lawmakers to allocate makeup funds if the federal government doesn’t pay up. Kentucky urged district leaders to petition representatives in Congress.
McMahon’s March 28 letter came only days after her agency had assured states that late liquidation policies wouldn’t change. The secretary offered one option for states and districts to regain the now-frozen funds: justify to the department why they’re necessary for COVID relief.
States that want to appeal late liquidation for individual projects—one at a time or in batches—have to include two main components in an email to the department under the new rules: “a brief description of how a particular project’s extension is necessary to mitigate the effects of COVID on American students’ education,” and “a justification of why the Department should exercise its discretion to grant your request.”
“The Department will review each request as it is received and work to provide a response as quickly as possible,” Hayley Sanon, principal deputy assistant secretary and acting assistant secretary in the department’s office of elementary and secondary education, wrote to states on April 3.
Some states have already begun work on appeals. North Dakota’s education department reviewed its 17 state-level projects that were approved for late liquidation and determined that 11 of them “meet the criteria for reconsideration,” said Dale Wetzel, a spokesperson for the state education agency. They include professional development for math teachers, access to an AI-powered reading tutor program, and subsidized enrollment fees for students taking computer science classes.
Other states are more wary. Jill Briggs, Vermont’s deputy education secretary, told state lawmakers Wednesday that she expects appeals for roughly $16 million of halted pandemic funds in her state will be reviewed not by Education Department staffers, but by people associated with the Department of Government Efficiency team led by billionaire Elon Musk.
Spokespeople for several education departments said they have sent questions to the Education Department since the March 28 letter but haven’t received a response. During a webinar on April 3, a department staffer said the agency is still working through its emails and will respond to all of them, said Mary Lee Belz, a spokesperson for the North Carolina education department.
Cardona said he’s skeptical that the appeal process will work out for everyone seeking to restore funds.
“These are the same people that are making up their own rules, and you’re going to ask them for additional help, or trust that it’s going to be done fairly?” Cardona told Education Week. “Either way it’s a tough situation for these district leaders who are trying their best to get our schools up to par, and provide support for our students.”
Democratic members of Congress who met with McMahon on April 1 said the education secretary told them she would review letters from federal lawmakers as part of the appeal process.
McMahon “expressed that she is going to be looking at those letters from us, from Congress, individually, looking at how that funding has been spent individually, to ensure that it did go to addressing the learning loss that occurred across this country during COVID,” Rep. Sarah Elfreth, D-Md., said during a press conference immediately after the meeting with McMahon. “I think we all have some letters to write today.”
Members of Congress from Massachusetts, including Democratic Sens. Ed Markey and Elizabeth Warren, sent a letter on Thursday urging McMahon to restore all of the late liquidation approvals and saying they’re “astonished at the callous disregard for the wellbeing of students, educators, and communities.”
A spokesperson for the Education Department didn’t respond to a request for comment.
Construction, literacy, and technology projects are affected by the rule changes
Many districts that sought late liquidation approval needed more time for their construction contractors to wrap up facilities projects before receiving final payment.
The Waterbury district in Connecticut has work underway to install air-conditioning in 13 of its elementary school buildings, where temperatures have risen into the 90s on hot days in recent years. The district had requested late liquidation for the project so it could test the newly installed systems during the warmer months.
If the federal money doesn’t come through, the district will instead have to pull from its supply of local construction dollars, the superintendent told CT Mirror.
In Brick, N.J., a contractor for a middle school got a late start on an HVAC project because a local utility was too busy cleaning up storm damage elsewhere in the state to perform a required transformer installation on time. Now the district may lose $97,000 in ESSER funds. The state hasn’t yet said whether it will apply to extend the deadline for individual projects.
The federal Education Department’s press secretary mocked the state of Massachusetts in an April 1 post on X for spending its pandemic funds on “BUILDINGS, rather than learning recovery.” But in Massachusetts and elsewhere, construction wasn’t the only category of expenses affected by the rule changes.
Massachusetts was waiting to spend down ESSER funds on five regional centers that were helping teachers transition from emergency certification to provisional or permanent licenses.
Wisconsin’s education department has roughly $500,000 left to spend on a contract with the state’s Child Abuse and Neglect Prevention Board, a state government body that partners with the education system to provide services to homeless students. Those services will end if the state can’t access those federal dollars, a spokesperson for the state education agency said.
Oregon’s education department this week canceled efforts to develop professional development resources for math and literacy instruction for which it expected to receive federal reimbursement.
Kentucky has $1 million of statewide technology investments now at risk, including a new student and parent registration system designed to be more secure against cyberattacks, and a new digital system for transmitting student transcripts from schools to universities.
And in Nevada, pandemic relief funds approved for late liquidation were covering salaries for 14 employees at the state education agency who work on initiatives like training for private schools, competency-based learning, and instructional enrichment. The agency in the last week laid off six of those employees, the Nevada Independent reported.
Reimbursement requests from before the rules changed are weeks late
Even after two written dispatches from the department, it’s still not entirely clear which sets of money are held up by the sudden rule change, and which states can still expect to receive.
Prior to March 28, some states had handed out routine reimbursements to their districts that had submitted expenses they intended to cover with ESSER funds approved for late liquidation. The states then expected to collect federal reimbursement to cover the expenses.
The Education Department last year had granted a late liquidation approval to New Hampshire that covered $800,000 of HVAC spending for the Mascoma Valley district. The state submitted $270,000 worth of reimbursement requests to the federal government on the district’s behalf before March 28, but hadn’t gotten that money back from the federal government as of April 1.
Typically, the state would receive federal reimbursement within a day of requesting it. But after the U.S. Education Department made the reimbursement process more cumbersome in February, and then dismissed staff members who help with education grants in March, some states have reimbursements that have been stuck in limbo for weeks.
States’ varied approaches to handling federal education grants, and the complex tangle of pandemic-era funding programs caught up in the rule changes, have left everyone from state education chiefs to school district leaders bewildered.
Michigan issued a statement on March 31 highlighting that the rule changes could affect as much as $40 million in federal funds, then followed up the next day to clarify that before March 28, the state had already reimbursed districts for $24 million.
Districts that received that state reimbursement won’t see their funding taken away. But the state, meanwhile, still believes it’s owed money from the federal government.
“All $40 million is in jeopardy unless the U.S. Department of Education agrees to honor the previous extension approval request from the federal government,” the statement says.
