North Carolina Attorney General Jeff Jackson on March 11 secured an agreement to restore more than $2.5 million in federal education funding for North Carolina public schools for the remainder of the school year, a temporary reprieve while his lawsuit against the US Department of Education (USDE) moves forward.
The restored funds flow through the Full-Service Community Schools (FSCS) program, which serves approximately 23,000 students statewide, including in counties still rebuilding from Hurricane Helene. Under the agreement, the US Department of Education will allow grantee schools to continue drawing on previously awarded grant funds through June 30.
“This is a good outcome for our students — but not the final step in our fight,” Jackson said in a statement. “Schools and students will continue to get much-needed funding they were promised for the time being while we continue this case.”
Jackson — along with attorneys general in Maryland and Washington, DC — filed suit against the department in December after it terminated a $50 million grant to North Carolina for the FSCS program. The termination followed a policy shift under the Trump administration, which has moved to cut or restructure federal programs it deems outside the scope of traditional education.
In a statement provided to media outlets, Department of Education spokesperson Madi Biedermann said that the FSCS funds were being redirected toward “high-quality programs that better serve special-needs students.”
Biedermann added that the grants were cut because they frequently “use overt race preferences or perpetuate divisive concepts and stereotypes, which no student should be exposed to.”
“The Trump Administration is no longer allowing taxpayer dollars to go out the door on autopilot — we are evaluating every federal grant to ensure they are in line with the Administration’s policy of prioritizing merit, fairness, and excellence in education,” Biedermann said.
In the legal challenge, Jackson argues the termination was “arbitrary and capricious” under the Administrative Procedure Act. The lawsuit contends the department lacked legal authority to cancel a multi-year grant for political reasons rather than for performance failures or financial mismanagement.
North Carolina schools received less than three weeks’ notice of the cancellation. Some participating schools in Western North Carolina had been serving as emergency relief sites for Helene-displaced families.
The program funds expanded learning opportunities, teacher retention, and support for students dealing with adverse childhood experiences, primarily in rural and low-income communities.
The restored $2.5 million covers only the current school year — the broader legal challenge over the full grant remains active.
