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AG Nessel Files Lawsuit Against Department of Education for Illegally Rescinding Funding Deadline

LANSING – Today, Michigan Attorney General Dana Nessel joined a coalition of 15 attorneys general in filing a lawsuit against the U.S. Department of Education (DOE) and Secretary of Education Linda McMahon, for unlawfully rescinding an extended deadline that allowed states and local school districts to use pandemic relief education funds appropriated by Congress. The lawsuit challenges the Department’s abrupt decision, communicated on March 28, 2025, to shorten the deadline for reimbursement requests related to Coronavirus Response and Relief Supplemental Appropriations and American Rescue Plan funds to that same day. The prior deadlines, in March of 2026, had been in place to allow for delayed reimbursement of pre-approved projects.

“School districts across our state relied on a clear, approved timeline to complete essential projects to keep classrooms warm, ventilated, and safe for kids,” Nessel said. “Rescinding those funds at the last minute without warning or any legal basis is illegal and harms some of Michigan’s most vulnerable children. If the administration won’t stand with America’s students, I proudly will.”

Upon request by the State, the DOE had extended the period during which it would pay out several significant funding sources allocated by Congress. When the DOE terminated those extensions, they caused immediate and irreparable harm to the Michigan Department of Education (MDE), local districts, and the State’s public school students by severing the State’s access to more than $25 million in education stabilization funds. 

“We will continue to work with Attorney General Nessel to challenge federal actions that harm schoolchildren and violate the law,” said State Superintendent Dr. Michael F. Rice. “The U.S. Department of Education should not be able to rescind its prior approval for funds to local school districts to protect the health and safety of students and school staff.”

Among the millions of dollars withheld are critical education and care program dollars meant for children experiencing homelessness, coordinated transportation funding to support attendance in rural areas, and professional development funds to support educators’ work with students who have experienced trauma. School districts expecting a share of the $188,000 already requested and approved for these purposes include: Bay-Arenac ISD, Hudsonville Public Schools, Macomb ISD, Marquette-Alger RESA, Monroe County ISD, and the St. Joseph County ISD.

“I will fight for our students and protect students from any federal action that would harm them,” said Dr. Pamela Pugh, president of State Board of Education. “As a public health professional for many years, I know the importance of projects to improve the air quality and safety of our schools—which was illustrated during the COVID-19 pandemic. Our children deserve better from the U.S. Department of Education.” 

Nearly $17 million to support critical programs and infrastructure improvements for Michigan schools, including millions for building upgrades already underway, remain illegally withheld by the DOE. These millions are intended to fund construction of additional classroom space, HVAC installation, upgrades, and repairs, purchases of curriculum and instructional material, purchases of library books and equipment, and purchases of other educational technology. 

The school districts were approved to receive the following funds, which have yet to be drawn: 

  • Battle Creek Public Schools, $2.49 million;
  • Benton Harbor Area Schools, $2.9 million;
  • Flint City School District, $1.4 million;
  • Hamtramck School District, $3.9 million; and 
  • Pontiac School District, $3.2 million.

 Additional schools approved for hundreds of thousands of dollars include Bridgeport-Spaulding, Brighton Area Schools, Chandler Park Academy, Lincoln Park School District, and Woodhaven-Brownstown Schools. 

The lawsuit alleges the Department of Education violated the Administrative Procedure Act by:

  • Assuming with no legal or factual support, that all appropriations in COVID-19 related laws were only intended for use during the declared public health emergency; 
  • Failing to provide a reasoned explanation for reversing the agency’s prior determination that the States had submitted sufficient justification and document to warrant granting extensions;
  • Ignoring the substantial reliance interests of the States and their local school districts, nonpublic schools, and contractors, and the tremendously harmful impact of immediately terminating, without any advance warning, the period within which they could draw upon hundreds of millions of dollars in congressionally appropriated funds midstream; 
  • Asserting that this funding was suddenly unnecessary due to the “end of the pandemic”—an event that formally occurred almost two years ago on May 11, 2023, well before DOE approved States’ extension requests; and 
  • Misapplying the criteria for considering extension requests. 

Joining Attorney General Nessel in filing this lawsuit are the attorneys general of Arizona, California, Delaware, Hawai’i, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and the District of Columbia, along with the Governor of Pennsylvania.

The complaint can be found here (PDF).

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