States scramble to address ‘catastrophic' halt to federal pandemic education aid

Politico

01-04-2025

State education superintendents and elected officials scrambled on Monday to assess how schools across the country will absorb the Trump administration's move to halt payouts on billions of dollars in federal pandemic aid, while warning that construction and tutoring programs could stop without a resolution.
New Jersey Democratic Gov. Phil Murphy said his state was facing a 'devastating federal funding cut from the Trump Administration' of $85 million — an assertion that prompted rebuke from the federal Education Department.
Michigan officials said their schools stood to lose approximately $40 million already committed to projects including heating, ventilation and air conditioning systems. And Maryland authorities declared the state could lose hundreds of millions of dollars that help pay for programs including literacy, tutoring, infrastructure and summer school initiatives.
'Shock does not begin to describe our reaction when we received the notification,' of Friday's decision
from the Education Department
, Maryland schools chief Carey Wright told reporters.
'The USDE's decision is catastrophic,' Wright said of the federal agency. 'These funds have been spent or committed with every expectation of reimbursement.'
Schools were required to finalize plans to use the last of nearly $130 billion in federal Covid-19 relief aid by September 2024 and liquidate the money by January, unless they won a reprieve from the Biden administration.
Those 'liquidation extension'
requests could have allowed schools
to spend the federal money on previously approved, ongoing projects through early next year.
States still had to liquidate approximately $2.5 billion in American Rescue Plan funds meant for elementary and high schools as of early March, according to a department summary obtained by POLITICO. Hundreds of millions dollars worth of additional funds for homeless students and private schools were also awaiting final liquidation by that time.
Dozens of states, plus Puerto Rico and the District of Columbia, had received approval for the extended federal reimbursement timetable. Education Secretary Linda McMahon then announced on Friday that the department 'has reconsidered' those requests
in a letter obtained by POLITICO
.
'Extending deadlines for COVID-related grants, which are in fact taxpayer funds, years after the COVID pandemic ended is not consistent with the Department's priorities and thus not a worthwhile exercise of its discretion,' McMahon wrote. She added that governments could reapply for spending extensions on individual projects.
Murphy, however, was among state officials who suggested the abrupt end to the federal initiative has sparked a growing sense of crisis.
'These cuts are reckless and irresponsible, allowing us very little time for contingency plans,' Murphy
said in a statement
. 'At a time of unprecedented chaos and uncertainty at the federal level, Washington is failing the next generation.'
Infrastructure projects in 20 New Jersey school districts would be affected, Murphy said.
The Education Department retorted that Murphy 'doesn't know what he is talking about,' in a series of
social media posts
on Monday. 'New Jersey is continuing to receive all recurring federal education funds — but his COVID slush fund is over,' the department said.
Local school officials had pressed former President Joe Biden's administration for added breathing room to spend relief funds signed into law under the American Rescue Plan — arguing that a constellation of pandemic-era staffing challenges, vendor contract negotiations and construction concerns required government approval to stretch spending timetables through next year.
'Walking back a federal commitment to pandemic relief funds to improve the air quality, healthfulness, and safety of schools coming out of the pandemic is unacceptable,' Michigan state schools Superintendent Michael Rice
said in a statement
.
Twenty-seven Michigan school districts have struck contracts to replace ventilation systems, boilers and windows, he said.
'Without the promised March 2026 date for federal reimbursement requests, districts may be forced to reduce instructional expenditures for students, diminish savings, or both to honor these contracts,' Rice said.
Multiple state school systems contacted by POLITICO on Monday said they were still trying to assess the decision's impact on their communities, or they did not respond to requests for comment.
Maryland school officials, meanwhile, said they were consulting with the state attorney general's office and exploring their legal options.
'We're still in, I think, a state of confusion,' Wright said Monday.