Lawsuit prompts release of nearly $7B in frozen federal education funds

Around $7 billion in federal education funds will be restored after a multi-state lawsuit over the Trump administration’s decision to freeze the funds in June.

Minnesota Attorney General Keith Ellison joined more than 20 other states in suing the administration, calling the funding freezes on six longstanding programs "unconstitutional, unlawful and arbitrary.”

On Tuesday, Aug. 26, Ellison announced the lawsuit will be dismissed with stipulations that the remaining funds would be released by Oct. 3.

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"I’m pleased that my team and I were able to stop the Trump Administration from breaking the law and withholding $74 million from Minnesota classrooms just weeks before the start of the new school year,” stated Ellison in a release.

“Since Donald Trump was sworn in again in January of 2025, my office has stopped his administration from withholding hundreds of millions of dollars in funding and grants for our state.

"When Minnesotans pay taxes to the federal government, we expect at that money to come back to Minnesota to support our schools, improve our infrastructure, fund first responders and law enforcement, and improve people’s lives. If Donald Trump and his administration continue to break the law and try to seize those funds, I will continue to meet them in court.”

Most of the $74 million in education funds frozen in Minnesota were released by July 25. Minnesota and other states have used these federal education funds for after-school and summer learning programs, programs for migrant and English-as-a-second-language learners, and teacher training.