A federal judge has struck down the Education Department's policy of terminating teacher-training grants tied to diversity, equity and inclusion programs, ruling that the directive behind the cancellations broke federal law. U.S. District Judge Angel Kelley found that the February 2025 agency directive violated the Administrative Procedure Act, siding with eight Democratic-led states that had sued to block the cuts.
The ruling, reported Thursday by the Charlotte Observer, marks the latest turn in a year-and-a-half legal battle over roughly $600 million in grants the Education Department canceled starting in February 2025. Kelley, who was appointed by Democratic President Joe Biden, ruled in favor of the eight states and found the department's policy was arbitrary and capricious. She also determined the agency had failed to consider how the cancellations would affect people who depended on the funding.
How the Cuts Began
The Education Department announced the cancellation of more than $600 million in grants in February 2025, saying the money had gone to train teachers and education agencies on what it described as divisive ideologies, including DEI and social justice activism. The termination directive ultimately canceled 109 grants, wiping out more than 90% of the awards issued under the Teacher Quality Partnership and Supporting Effective Educator Development programs, both of which fund K-12 teacher preparation.
Kelley found that the department's policy lacked discernible criteria for determining which programs counted as DEI and were disfavored for funding. Among the terminated awards were 40 grants that had gone to universities and other institutions across the eight states that sued, which were led by California, Massachusetts and New Jersey. Court filings previously described the grants as supporting initiatives that taught teachers second languages, recruited them to high-poverty schools and trained them on special education requirements, according to Courthouse News Service.
A Case That Bounced Through the Courts
The fight over the grants has already made one trip through the nation's highest court. In April 2025, the U.S. Supreme Court, with its 6-3 conservative majority, allowed the Trump administration to proceed with terminating the teacher-training grants while litigation continued, putting a lower-court order to reinstate the funding on hold, according to CNBC. At that point, about $65 million in grant payments remained outstanding.
That reinstatement order had come from a different judge earlier in the case. U.S. District Judge Myong Joun had issued a temporary restraining order blocking the terminations because officials had not properly explained their reasoning, the same CNBC report noted. A preliminary injunction issued Feb. 21, 2025, had also prohibited the department from terminating grants covered by the lawsuit, per K-12 Dive's coverage of the case. Separately, on March 17, 2025, the U.S. District Court for the District of Maryland ordered reinstatement of educator-preparation grants in a related lawsuit brought by teacher-training groups, according to the American Association of Colleges for Teacher Education.
What the States Argued
The eight states — California, Massachusetts, New Jersey, Colorado, Illinois, Maryland, New York and Wisconsin — argued that thousands of teachers' salaries were funded through the grants and warned that losing the money would worsen the nationwide teacher shortage, according to Courthouse News Service. Kelley herself wrote that thousands of teachers, along with those in teacher-training pipelines, would be affected by the directive. States also contended the programs had boosted teacher retention rates and helped educators stay in the profession beyond five years, per a report from 13abc.
The scale of the disruption extended beyond state governments. The National Center for Teacher Residencies said the cuts stood to cost the organization nearly $1.2 million, affecting 128 teacher residents already enrolled across 13 programs and blocking enrollment of another 190 residents, according to K-12 Dive.
What Kelley's Ruling Does and Doesn't Resolve
Kelley's decision does not clear the way for states or grantees to simply recover lost money through her court. She ruled that any lawsuits seeking recovery of funds lost from the grant terminations must instead proceed in the Court of Federal Claims. Kelley retained authority to determine whether the February 2025 directive complied with the Administrative Procedure Act, and it was on those grounds that she found the policy unlawful, per the Charlotte Observer's report.
The Education Department did not immediately respond to a request for comment, according to the same report. The case adds another chapter to a dispute that has already reached the Supreme Court once and reshaped how hundreds of teacher-training programs across the country plan their funding.
