Education Department loses bid to terminate mental health grants

A federal judge found the department can't make funding decisions for already approved grants by evaluating the applications against new, unpublished policy priorities.SEATTLE (CN) — A federal judge blocked the U.S. Department of Education on Tuesday from another attempt to cancel millions in school mental health grants.“Plaintiff states need not wait until the department effectuates terminations to challenge the department’s clear intention to do so,” U.S. District Judge Kymberly Evanson wrote in a 15-page opinion.The order comes less than a week after a coalition of states faced off against the federal agency before the Joe Biden appointee.The coalition of states initially sued the department last year after it moved to discontinue roughly $1 billion in school mental health grants. Evanson blocked the move in December and ordered the agency to reinstate the grants.The injunction required the department to reconsider each grant using proper regulatory procedures and to base decisions on actual performance data rather than political preferences — namely adherence to the Trump administration’s views on diversity, equity and inclusion.However, after the department announced its intent to terminate the grants again and asked Evanson to clarify her court order, the coalition of states filed a new lawsuit earlier this month requesting a temporary restraining order to block the department from cutting funding again.Reviewing the evidence in the latest case, Evanson found the department has “formulated a plan to re-review grants for termination based on unlawful reasons.”Specifically, Evanson looked to two 2025 directives that called for the department to review existing grants for alignment with Trump’s priorities and a June notice that informed the court and grant recipients the department would be terminating “some or all” of the grants.Evanson again found the department can’t make funding decisions for already approved, multiyear grants by evaluating the original grant applications against new, unpublished priorities that weren’t in effect at the time the grants were approved.“The court previously enjoined a similar if not substantively identical procedure in the Washington action used to discontinue the grants, and the procedure is no more lawful in the termination context here than it was there,” Evanson wrote, referring to the earlier case.The agency also can’t withhold payments to grantees without first providing notice and opportunity for review.“Because the department’s termination plan likely reflects an unexplained change in department policy, and the department’s plan likely fails to comply with its own regulations or the statutes identified in this section, and bases terminations on factors Congress did not intend the department to consider, the department’s termination plan is likely arbitrary and capricious and contrary to law and thus violates the [Administrative Procedure Act],” Evanson wrote.The federal agency had attempted to convince Evanson the court didn’t have jurisdiction over the states’ claims, but the judge was not persuaded. The agency also argued the states must wait until after the terminations have occurred to bring their challenge, but Evanson again disagreed.“According to the department, no court would have jurisdiction to provide injunctive relief in response to grant terminations after they occur,” Evanson wrote. “Thus, plaintiff states need not simply wait out the termination clock ‘in order to have their day in court.’”Neither the agency nor the plaintiff states responded to a request for comment before press time.The case is focused on two grant programs: the Mental Health Service Professional Demonstration Grant Program and the School-Based Mental Health Services Grant Program. Both received steadily increasing appropriations from Congress over several years.The grant programs at issue were created by Congress in 2018 and 2020, spurred by episodes of devastating school shootings. The multiyear grants are intended to address the shortage of school-based mental health service providers in low-income schools and to permanently bring 14,000 additional mental health professionals into U.S. schools that need them most.In their first year alone, the programs provided mental and behavioral health services to nearly 775,000 elementary and secondary students nationwide, and they have resulted in a 50% reduction in suicide risk at high-need schools, decreases in absenteeism and behavioral issues and increases in positive student-staff engagement, the states claimed.In February of last year, the Education Department issued what it called a “Directive on Grant Priorities,” announcing it would review all existing grants based on the current administration’s policy preferences. By April, most grant recipients in the plaintiff states received notices that their funding would be terminated.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads