Trump administration agrees to unfreeze $171M for Michigan schools

The Trump administration has agreed to release the remainder of roughly $171 million in frozen federal education funding for Michigan following a multistate lawsuit.

Attorney General Dana Nessel announced Tuesday, Aug. 26, she had secured the agreement from President Donald Trump’s administration to release the full balance of remaining education funding by Oct. 3.

Nessel in July joined a coalition of other states in suing the Trump administration over the frozen funding. The lawsuit challenged what she called the administration’s “unconstitutional, unlawful and arbitrary decision” to freeze funding for six longstanding programs administered by the U.S. Department of Justice.

Roughly $6.8 billion was frozen nationwide, with $171 million of that meant for Michigan schools. The programs impacted include after-school learning centers, teacher professional development, adult literacy, English learning and educational assistance to the children of migrant workers.

Without those dollars, the state alleged, local school districts and education agencies would’ve had insufficient funds after developing staffing plans and services under the affected grants for the coming 2025-26 school year.

“I am relieved that these unlawfully held funds will finally be released to schools as students return to the classroom,” Nessel said. “This agreement is yet another example of how these lawsuits are making a real difference to Michigan families. I remain committed to working alongside my fellow Democratic attorneys general across the country to stand up against illegal federal actions and to fight on behalf of our residents.”

Providing the Trump administration ensures the remaining funding is released on time, the multistate coalition and the Trump administration have agreed to dismiss the case.

The agreement to unfreeze funding comes as Michigan schools face added uncertainty about how much money they’ll be receiving from the state in the upcoming school year. 

Michigan lawmakers failed to deliver a budget for the upcoming fiscal year by the July 1 deadline and remain at an impasse. If the Legislature can’t agree on a budget by midnight Sept. 30, the state will face a government shutdown.

Nessel joined the coalition of 23 other attorneys general and two governors on July 14 in filing the lawsuit against the Trump administration, arguing the freeze violated federal funding statutes and regulations along with the constitutional separation of powers.

Each year, the federal department of education makes around 25% of program funds available to states on July 1 by the time local agencies are required to pass budgets for the following school year. But on June 30, state agencies across the country received a notification that the department would not be obligating funds for six programs on July 1.

Soon after the lawsuit was filed, the Department of Education notified Michigan that it would begin releasing the impounded dollars for the current fiscal year. Later, the state received grant award notifications confirming that the entirety of frozen funds required to be made available to states on July 1 had been released.

The Trump administration froze the funding as part of an effort to review the grants for alignment with the president’s priorities. The administration had accused schools of using the dollars to “subsidize a radical leftwing agenda,” the Associated Press reported.

The Office of Management and Budget said in July that an initial review showed schools used some of the dollars to support people in the country illegally or promote LGBTQ+ inclusion, according to the Associated Press.

State Superintendent Michael Rice had called the funding freeze “an outrage that needs to be stopped in court.”

“The withholding of federal Title funding negatively and disproportionately affects students who are economically disadvantaged, are migrants or English learners, or need extra help with academics before-school, after-school, or during the summer,” Rice said at the time.

“Our schools and school districts rightfully believed that funds appropriated by Congress and signed into law by President Trump would be forthcoming. Now schools are left to scramble to try to figure out how to provide programs that are vitally important to children.”