US Education Dept. Seeks Court Approval to End $1B School Mental Health Grants
The US Education Department asked a federal court for permission to terminate $1 billion in school mental health grants.
Why it matters: Ending this funding could disrupt vital mental health services in schools, affecting compliance and grant management for legal teams at educational institutions and law firms.
- In December 2025, Judge Kymberly Evanson blocked the Education Department from stopping $1 billion in mental health grants for violating federal procedures.
- In July 2026, the Department sought court approval to terminate the grants, distinguishing this from simply discontinuing funding.
- Fifteen state attorneys general filed a lawsuit in July 2026 to prevent the termination, citing conflict with the court’s December order.
- These grants, created by Congress, support school-based mental health professionals in high-need and rural areas.
In December 2025, U.S. District Judge Kymberly Evanson barred the Department of Education from discontinuing nearly $1 billion in school mental health grants. The court ruled the department did not follow required federal procedures under the Administrative Procedure Act (APA) when attempting to stop funding.
In July 2026, the department returned to court, requesting permission to terminate the grants rather than just discontinue them. The department argues that termination involves different legal rules than discontinuation, allowing them to end funding despite the prior injunction. Termination here means formally ending the grant agreements, not simply halting payments.
In response, a coalition of 15 state attorneys general filed a lawsuit to block the termination effort, stating it contravenes the December 2025 court ruling. Oregon Attorney General Dan Rayfield expressed concern about the impact on student mental health, highlighting the legal dispute's significance (Rayfield’s announcement).
Attorney General Peter F. Neronha of Rhode Island emphasized the grants’ role in addressing rising mental health issues among students, such as loneliness, substance abuse, and violence fears. These federal funds support school-based mental health professionals, especially in underserved and rural communities targeted by Congress.
Colorado Attorney General Phil Weiser described the Education Department’s legal strategy as attempting to bypass the court's earlier ruling, with California Attorney General Rob Bonta joining the lawsuit to protect the grant funds (California AG news release).
This case underscores the tension between federal administrative decisions and judicial oversight in managing education funds and compliance obligations for schools and legal professionals overseeing these grants.
By the numbers:
- $1 billion — value of school mental health grants at issue
- December 2025 — date Judge Evanson blocked grant discontinuation
- July 2026 — month Department sought court permission to terminate grants
Yes, but: The Education Department distinguishes termination from discontinuation based on differing regulatory frameworks, but courts will evaluate whether this distinction allows ending funding contrary to prior rulings.
What's next: The court will soon decide whether to grant the Education Department permission to terminate the grants, potentially setting a precedent for federal grant administration and judicial review.