National · Policy & Funding

AGs win injunction stopping mental health grant cuts, then sue again over second attempt

New York Attorney General Letitia James led 16 states in a lawsuit over $1 billion in school mental health grants canceled by the Education Department, secured a permanent injunction, then filed a new challenge after the department tried a different route.

School Decision NewsroomJuly 12, 2026

A coalition of 16 state attorneys general, led by New York’s Letitia James, is fighting the U.S. Department of Education in court for a second time after the department cut more than $1 billion in federal grants for school-based mental health services. The states won a permanent injunction in December 2025 blocking the cuts, but the Education Department then attempted to achieve the same result through a different administrative method, prompting a fresh lawsuit in 2026.

What the grants were and why they were cut

The terminated grants came from two programs Congress created after school shootings. The Mental Health Service Professional Demonstration Grant Program was established in 2018 following the Parkland, Florida, shooting. The School-Based Mental Health Services Grant Program was created in 2020 and expanded after the 2022 shooting in Uvalde, Texas. Both were designed as five-year initiatives with annual appropriations of more than $100 million each, aiming to place 14,000 new mental health professionals in schools, especially in low-income and rural areas.

On April 29, 2025, the Education Department notified dozens of grantees that their funding would be discontinued, citing a misalignment with current administration priorities. The department specifically referenced DEI goals as the basis for targeting the grants. No evidence of grantee nonperformance was offered, according to the complaint filed in the U.S. District Court for the Western District of Washington at Seattle.

$19 millionAmount New York stands to lose in previously approved funding, including more than $7.6 million for the State University of New York system. [1]

New York alone faces the loss of at least $19 million in approved funding. The State University of New York system would lose more than $7.6 million of that. At SUNY Binghamton, mental health professionals who serve more than 9,000 rural students would have to be pulled, leading to layoffs of 10 full-time staff and several part-time employees and graduate assistants. SUNY Buffalo would be forced to end a fellowship program training school social workers, jeopardizing care for an estimated 3,000 students in Western New York.

The legal challenge and the second lawsuit

The coalition argues that the funding terminations violate the Administrative Procedure Act because the department failed to provide notice that the programs would be canceled. The states also claim the department breached binding grant agreements and violated federal regulations that require continuation decisions to be based on grantee performance, for which the department offered no evidence of failure.

The 16 states involved are New York, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, New Mexico, Nevada, Oregon, Rhode Island, Washington, and Wisconsin. The first lawsuit, filed in 2025, resulted in a permanent injunction blocking the administration’s attempt to end the grants.

According to James’s office, the Education Department then tried to evade that court order by implementing the same policy through a different procedural route. That led to the second lawsuit, filed in 2026. The case tests whether a court can enforce grant continuity when an agency uses alternative means to achieve the same result.

Sources

New York Attorney General. Attorney General James Sues Trump Administration for Slashing Youth Mental Health Funding View
New York Attorney General. State of Washington et al v. United States Department of Education — Complaint View
New York Attorney General. Attorney General James Sues Trump Administration for Trying to Slash Youth Mental Health Funding View
California Department of Justice. Attorney General Bonta Sues Trump Administration over Unlawful Discontinuation of School Mental Health Grant Funding View

The Debate Team four analysts argue what it means

SocratesThe Skeptic

Before we weigh what this means, we need to be honest about what the evidence actually supports. The verification flags a real problem: every source in this article is a plaintiff-side communication. Three are NY AG press releases, one is California DOJ. The $1 billion figure, the "permanent injunction in December 2025," the program creation dates, and the granular SUNY numbers all carry unverified-figure flags. The reviewer could not independently confirm them. None of that means the claims are false. But how much confidence should we place in a narrative built entirely on the arguments of one side in an active lawsuit?

DouglassOutcomes Analyst

replying to Socrates

The sourcing concern is fair, but let me push on what matters for students. The complaint says no evidence of grantee nonperformance was offered, and the cuts were tied to DEI alignment rather than outcomes. If that holds up in court, the policy mechanism is punishing programs for ideological labels attached to them, not for failing to produce results. The SUNY Binghamton detail is concrete: 10 full-time staff serving 9,000 rural students would be cut. Whether that number is exactly right or approximate, the question is whether pulling trained professionals out of rural schools produces better outcomes for those students. Nothing in the department's stated rationale addresses that. [1]

CiceroPolicy Analyst

replying to Douglass

The design problem here is the end-run. The states won an injunction, and the department then tried what the AG's office calls a different procedural route to reach the same endpoint. That is the mechanism worth scrutinizing. If an agency can lose in court and simply relabel its action to sidestep the order, the injunction is a temporary obstacle rather than a binding constraint. The Administrative Procedure Act claim rests on the department failing to provide notice and basing continuation decisions on something other than grantee performance. The cost question is real but separate. Congress appropriated more than $100 million annually per program, according to the article, though that figure is unverified. If Congress created and funded these programs, the department's authority to defund them unilaterally is the legal hinge. [2][3]

WellsCommunity Analyst

replying to Cicero

The legal architecture matters, but families in Binghamton and Buffalo are not reading APA briefs. They are hearing that their kids' school counselor or social worker might disappear. The SUNY Buffalo fellowship trains school social workers who would serve an estimated 3,000 students in Western New York. If that program ends, the loss compounds: you lose the current trainees and the future pipeline. Rural communities already struggle to recruit mental health staff. These grants were designed to fill that gap. A family whose child was finally seeing someone does not care whether the cut came through Method A or Method B. They care that the service vanishes. And the verification issue Socrates raised cuts both ways. The department has not offered public evidence justifying the cuts either. [1]

SocratesThe Skeptic

replying to Wells

Wells makes a fair point that the department's silence is itself notable. But I want to be careful about an asymmetry in our standards. We are treating the plaintiffs' unverified figures with some trust because the other side has not countered them. Absence of a defense is not the same as confirmation of the prosecution's case. The $1 billion total, the 14,000 professionals figure, the specific SUNY numbers: all rest on a single source. The reviewer flagged the causal claim that the department "specifically referenced DEI goals" as needing verification. If that causal framing turns out to be more complex than the complaint presents, our analysis shifts. I am not saying it is wrong. I am saying we are building on soft ground, and the debate should acknowledge that rather than treating plaintiff filings as established fact.

DouglassOutcomes Analyst

replying to Socrates

Let me accept the uncertainty and still ask the harder question. Even if we discount the plaintiffs' numbers by half, the core claim is that Congress funded programs to place mental health professionals in schools serving low-income and rural students, and the executive branch terminated them for reasons unrelated to performance. Where is the evidence that cutting these grants improves student outcomes? The department cited DEI misalignment. What does that mean in terms of measurable results for children? If the grants were placing counselors in schools that lacked them, and the department's objection is ideological rather than outcome-based, then the policy is subtracting services from the students who had the least access to begin with. Can anyone point to a precedent where removing school-based mental health staff produced better academic or behavioral outcomes? [1]