Federal court blocks Trump's DEI funding threat to schools

On Feb. 14, 2025, Education Secretary Linda McMahon sent a 'Dear Colleague' letter to schools and colleges across America. The letter said educational institutions that continued diversity, equity, and inclusion (DEI) programs would lose federal funding. McMahon claimed the programs violated a 2023 Supreme Court decision that banned race-based college admissions. But the 2023 decision only addressed college admissions—McMahon expanded it to cover hiring, financial aid, student services, and classroom teaching.

The threat was concrete. Schools rely on Title I funding, the largest federal source for K-12 education. It goes to low-income schools—the ones most likely to have diversity programs. McMahon gave schools two weeks to comply or face investigations and funding cuts. She set up a federal portal where parents could report teachers and programs they believed violated the order. Teachers began asking lawyers if they could lose their jobs for teaching American history or literature.

The legal challenges came quickly. The National Education Association and American Federation of Teachers sued in Apr. 2025, joined by the ACLU. Other groups and Democratic-led states filed separate lawsuits. All of them argued the same thing: the guidance was unconstitutionally vague, violated the First Amendment, and exceeded the Education Department's legal authority.

On Apr. 24, 2025, three federal judges issued preliminary injunctions blocking the guidance the same day. Judge Landya McCafferty, in New Hampshire, wrote that a teacher violates the letter if she says structural racism exists in America, but complies if she denies it exists. 'That is textbook viewpoint discrimination,' McCafferty wrote. Judge Dabney Friedrich, a Trump appointee, called the guidance 'unconstitutionally vague.' All three judges agreed McMahon likely broke the law.

The most powerful ruling came on Aug. 14, 2025. Federal Judge Stephanie Gallagher in Maryland didn't just block the letter temporarily—she vacated it completely, meaning it had no legal effect anywhere in America. Gallagher found that McMahon violated the Administrative Procedure Act by issuing binding rules without the 'notice and comment' process Congress requires. The Education Department hadn't let the public weigh in. It hadn't explained its reasoning. It just issued threats.

The Trump administration faced a choice: appeal to the Supreme Court or quit. On Jan. 21, 2026, it quit. The Education Department filed to dismiss its appeal. By dropping the case, the administration effectively conceded it had lost. The ruling stands nationwide. Schools can continue diversity programs without losing federal funding. McMahon's Dear Colleague letter is dead.

What this case teaches about power: The executive branch can't use federal funding as a weapon to enforce its preferred policies without following the law. When an agency issues guidance that affects millions of people—teachers, students, schools—it has to follow procedures Congress set. It can't rewrite Supreme Court decisions to say something they didn't say. And courts will stop it, even in a conservative moment, because the Constitution still matters.