NC Budget Freezes Legal Aid Funds for Immigration Services
North Carolina's budget proposal freezes funding for legal aid groups providing immigration assistance.
Why it matters: This move threatens legal aid access for immigrant communities, impacting legal professionals and in-house teams working on immigration law.
- The NC General Assembly's budget bars grants for legal aid providing immigration and naturalization assistance.
- Funding freeze stems from concerns over advocacy, also restricting transgender health and legislative advocacy grants.
- NC IOLTA program, key civil legal services funder, has frozen grantmaking since July 2025 through mid-2026.
- Legal Aid of NC closed nine offices and laid off dozens of attorneys due to the funding freeze.
The North Carolina General Assembly's proposed 2026 budget includes a significant provision freezing funds for legal aid groups involved in immigration and naturalization assistance, according to Court House News. This bar extends to any organization providing representation or advocacy related to immigration law, transgender health, or general legislative advocacy except concerning their own funding or operational laws, as detailed by NC Newsline.
At the center of this disruption is North Carolina’s Interest on Lawyers’ Trust Accounts (IOLTA) program, which historically has distributed grants to civil legal aid providers serving low-income residents. In 2025, IOLTA distributed approximately $12 million, supporting services across all 100 counties (Legal Aid NC statement). However, since July 2025, grantmaking has been frozen, blocking funding through June 30, 2026 (IOLTA announcement).
This freeze has had immediate impacts: Legal Aid of North Carolina, a major fund recipient, has closed nine offices and laid off dozens of attorneys (WUNC report). Providers report a 22% drop in cases closed and an 11% drop in clients served in early 2026 versus 2025 (IOLTA report).
Peter Bolac, State Bar Executive Director, warned the reallocation of IOLTA funds risks devastating tens of thousands of vulnerable North Carolinians facing legal challenges related to housing, income, healthcare, and safety. State Senator Julie Mayfield highlighted the contradictory effects of supporting low-income groups while reducing services like domestic violence support (NC Newsline).
This development signals a deepening funding crisis for legal aid in North Carolina, with particular consequences for immigrant communities that rely on specialized legal assistance for immigration status and naturalization.
By the numbers:
- $12 million — IOLTA grants distributed in 2025 for civil legal aid.
- 22% — average decrease in cases closed by legal aid providers in Q1 2026 vs. Q1 2025.
- 11% — average decrease in clients served by legal aid providers in Q1 2026 vs. Q1 2025.
- 9 — number of Legal Aid of North Carolina offices closed following funding freeze.
- Dozens — attorneys laid off by Legal Aid of North Carolina due to funding freeze.
Yes, but: While the budget restricts funds for immigration-related legal aid, it also limits grants for advocacy in transgender health and certain legislative activities, indicating broader political concerns beyond immigration.
What's next: The IOLTA grantmaking freeze extends through June 30, 2026, with legal aid providers and stakeholders likely to engage in advocacy and negotiations afterward to restore funding.