Federal Judge Blocks Trump Threat to Cut School Funding Over Diversity, Equity and Inclusion Programs

President Donald Trump holds a signed an executive order relating to school discipline policies as Education Secretary Linda McMahon listens in the Oval Office of the White House, Wednesday, April 23, 2025, in Washington

A federal judge has blocked a directive from the Trump administration that threatened to strip federal funding from public schools and colleges over the use of diversity, equity, and inclusion (DEI) programs. The ruling is a significant win for educators and civil rights advocates who argue that such policies are essential to fostering inclusive educational environments.

The lawsuit, brought by the National Education Association and the American Civil Liberties Union, challenged the U.S. Department of Education’s February 2025 guidance, which warned that schools differentiating individuals based on race could face legal action and loss of federal funding. The Department further instructed states to collect signed certifications from local school systems affirming that they reject what it called “illegal DEI practices.”

U.S. District Court Judge Landya McCafferty found that the directive was “unconstitutionally vague” and did not clearly define what constitutes a DEI program or explain when such programs might violate civil rights law. “The Letter does not even define what a ‘DEI program’ is,” McCafferty wrote in her ruling. She also noted that the guidance may infringe on educators' free speech rights, calling it “textbook viewpoint discrimination” for penalizing faculty who teach about structural racism while allowing opposing viewpoints.

The challenged memo expands the interpretation of a 2023 Supreme Court decision that barred race-based college admissions, applying it to nearly all aspects of education—from hiring and scholarships to housing and campus events. The memo claimed DEI efforts were harming white and Asian American students, prompting widespread backlash from educators and civil rights organizations.

States were required to submit certification forms by Thursday, with noncompliance potentially resulting in cuts to Title I funding—a critical financial resource for schools serving low-income communities. Trump-era Education Secretary Linda McMahon reiterated this threat, stating in an interview that states refusing to comply “risk some defunding in their districts.”

The lawsuit also raised concerns that the memo restricts academic freedom and puts educators and school administrators in legal limbo. For example, it remains unclear whether voluntary student groups organized around minority identities would be allowed under the new policy.

The April directive’s ambiguity and its sweeping threat to cut education funding have led to a second legal challenge, filed in Maryland by the American Federation of Teachers and the American Sociological Association. Both lawsuits argue the policy lacks clarity, violates constitutional protections, and undermines decades of progress in educational equity.