NC Attorney General Sues Education Department Over $50M School Funding Cut

North Carolina Attorney General Jeff Jackson has filed a lawsuit against the U.S. Department of Education, alleging the agency unlawfully terminated nearly $50 million in federal funding for public schools across the state.

According to a news release from the North Carolina Department of Justice, the funding was primarily designated to support rural and low-income communities and was already being used by school districts statewide.

The money was awarded through the federal Full-Service Community Schools program and supported approximately 23,000 students, including those in counties heavily impacted by Hurricane Helene. On December 12, the Department of Education notified North Carolina that the grants would be terminated effective December 31.

State officials warn the sudden termination could force schools to shut down programs and lay off staff in the middle of the academic year.

Congress authorized and funded the Full-Service Community Schools program through federal education law to support schools serving communities facing high poverty, poor health outcomes, and lower educational attainment. In 2023, the Department of Education awarded more than $49.8 million to the North Carolina Community Schools Coalition, which includes the Department of Public Instruction.

Over a five-year period, the coalition planned to serve 55 schools across 18 public school districts. The grants were intended to expand learning opportunities in under-resourced areas, address Adverse Childhood Experiences affecting student development, strengthen and retain educators, and improve academic outcomes. Funding also supported early childhood education, literacy initiatives, family programming, and college and career exposure, including college tours and trade program presentations.

The program was designed to give districts flexibility to respond to local needs, such as addressing food insecurity, expanding after-school programs, providing health and mental health services, or helping families maintain stable housing. State officials say that flexibility is especially critical during emergencies.

Following Hurricane Helene, schools used the funds to help families secure temporary housing and transportation so students could remain connected to school during widespread disruption.

The lawsuit notes that the Department of Education had previously reviewed and approved how the funds would be used, and schools relied on that approval to hire staff and build programs. The department did not allege misuse of funds or performance failures before terminating the grants.

Under federal law, multi-year grants can only be ended for performance-based reasons. The lawsuit alleges the termination violates the Administrative Procedure Act, federal education regulations, and the U.S. Constitution, which grants Congress—not executive agencies—the authority to control federal spending.