New Jersey secures deal protecting more than $1 billion in federal education funding
TRENTON, N.J. — Acting Attorney General Jennifer Davenport announced Monday that New Jersey will retain more than $1 billion in federal education funding under a settlement reached with the Trump administration, resolving a lawsuit over efforts to withhold money from schools based on a disputed interpretation of civil rights law.
The agreement, reached by a coalition of 19 attorneys general, blocks the federal government from cutting off congressionally approved education funds to New Jersey state and local school districts. The lawsuit challenged the administration’s attempt to condition federal aid on compliance with a new interpretation of Title VI of the Civil Rights Act of 1964.
“In New Jersey, we will continue to stand against the Trump Administration’s relentless – and illegal – attacks on our most vulnerable residents,” Gov. Mikie Sherrill said. “The U.S. Department of Education’s nonsensical decision to cut off funds for our schools is an affront to hardworking families across our state, especially those in need of specialized education services.”
The Trump administration informed states on April 3, 2025, that they risked losing federal education funding unless they certified compliance with new federal guidance related to diversity, equity and inclusion efforts. New Jersey acknowledged that it complies with federal law but declined to certify under what state officials described as vague and legally unsupported requirements.
“Once again, we have turned back the Trump Administration’s unlawful attempts to threaten critical federal education funding to New Jersey,” Davenport said. “The agreement we’re announcing today ensures that the Trump Administration cannot cut off funding for our students — especially for students with special needs and other vulnerable youths — based on its misguided attack on programs that promote equal access to education in K-12 classrooms.”
New Jersey and the multistate coalition filed suit April 25, 2025, arguing that the funding threats violated the U.S. Constitution’s Spending Clause and Appropriations Clause, as well as federal administrative law. A related lawsuit brought by the American Federation of Teachers resulted in a federal court decision vacating the Department of Education’s certification requirement. That ruling later became final.
Under Monday’s settlement, the administration agreed to extend the relief granted in the teachers union case to New Jersey, preventing the withholding of education funds tied to the challenged conditions.
“By securing this settlement, the multistate coalition is protecting more than $1 billion that directly supports students with disabilities, students from low-income families, multilingual learners, and other vulnerable children who rely on these programs every day,” Acting Education Commissioner Lily Laux said. “This outcome preserves our school districts’ ability to focus on what matters most: creating safe, inclusive, and supportive learning environments where all students can thrive and achieve academic excellence.”
The protected funding supports special education services, programs for low-income students, teacher recruitment and training, English-language learning programs, and assistance for children in foster care and those experiencing homelessness.
Attorneys general from California, Colorado, Connecticut, Delaware, Hawai‘i, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington and Wisconsin joined Davenport in signing the agreement.
