Lawsuits against the U.S. Department of Education under the Trump administration have opened on at least eight fronts since early 2025, challenging mass layoffs, the executive order directing the department’s closure, frozen school funding, restrictions on diversity programs, cuts to civil rights investigations, inter-agency program transfers, and a new student loan rule. Some plaintiffs have won permanent judgments; the central dismantling case reached the Supreme Court, which in July 2025 allowed the layoffs to proceed while litigation continues.
The Central Dismantling Case: States and Unions v. McMahon
The most consequential lawsuit began on March 13, 2025, when 21 Democratic attorneys general, led by New York Attorney General Letitia James, sued in State of New York et al. v. Linda McMahon, United States Department of Education.1New York Attorney General. Attorney General James Sues Trump Administration to Stop Dismantling Department The coalition included the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, Oregon, Rhode Island, Washington, Wisconsin, Vermont, and the District of Columbia.2Chalkbeat. Trump Education Department Layoffs Subject of Lawsuit by Attorneys General
The suit targeted two actions. On March 11, 2025, the department announced a reduction in force that eliminated more than 1,300 positions from a workforce of roughly 4,100 and shut seven of the Office for Civil Rights’ twelve regional offices. On March 20, 2025, President Trump signed Executive Order 14242, directing Secretary McMahon to “take all necessary steps to facilitate the closure of the Department of Education and return authority over education to the States and local communities.”3The White House. Improving Education Outcomes by Empowering Parents, States, and Communities The administration also announced plans to transfer the $1.6 trillion federal student loan portfolio and special education programs to other agencies.4NPR. Trump Education Department Layoffs Injunction
The states argued that Congress created the department by statute in 1979 and that only Congress can abolish it.5Brookings Institution. FAQs: The U.S. Department of Education and the Trump Administration The case was later consolidated with a parallel suit from the American Federation of Teachers, the American Association of University Professors, SEIU, and two Massachusetts school districts, which added claims under the Take Care Clause and the Administrative Procedure Act.6Just Security. Federal Court Halts Mass Layoffs Civil Service
The District Court Injunction
On May 22, 2025, U.S. District Judge Myong J. Joun of the District of Massachusetts issued a sweeping preliminary injunction. The order blocked the reduction in force, halted implementation of Executive Order 14242, prevented transfers of student loan and special education functions, and directed the department to reinstate the roughly 1,300 terminated employees.4NPR. Trump Education Department Layoffs Injunction A follow-up order on June 18, 2025, specifically required the department to restore the Office for Civil Rights to its January 2025 staffing level and resume investigations of all pending discrimination complaints.7Education Week. Court Again Tells Trump Admin to Restore Laid-Off Ed. Dept. Staffers
The Supreme Court Stay
The First Circuit upheld Judge Joun’s injunction in June 2025. On July 14, 2025, the Supreme Court reversed course in a 6-3 order in McMahon v. New York (No. 24A1203), granting the government’s emergency stay application.8Supreme Court of the United States. McMahon v. New York, No. 24A1203 Justices Sotomayor, Kagan, and Jackson dissented.9SCOTUSblog. McMahon v. State of New York The practical effect: the administration can proceed with layoffs, execute the reduction-in-force plan, and begin transferring services to other agencies while the underlying merits case continues in the lower courts.10News From the States. U.S. Supreme Court Allows Trump to Carry Out Plan to Dismantle Education Department — For Now
The Dear Colleague Letter Cases
On February 14, 2025, the department issued a “Dear Colleague Letter” threatening to cut federal funding for schools and universities engaged in diversity, equity, and inclusion initiatives, giving institutions 14 days to comply.11ACLU. ACLU and NEA Sue U.S. Department of Education Over Unlawful Attack on Educational Equity Two lawsuits followed, and both plaintiffs won.
NEA v. Department of Education
On March 5, 2025, the National Education Association, its New Hampshire affiliate, and the Center for Black Educator Development, represented by the ACLU, sued in the U.S. District Court for the District of New Hampshire. They argued the letter violated the First Amendment by coercing self-censorship, was unconstitutionally vague under the Fifth Amendment, and imposed new legal obligations without process required by the Administrative Procedure Act. Plaintiffs also argued the department had misrepresented the 2023 Supreme Court ruling in Students for Fair Admissions v. Harvard to justify a far broader ban on DEI programming.12NEA. NEA and ACLU Sue U.S. Department of Education Over Unlawful Attack on Educational Equity
Chief Judge Landya McCafferty granted a preliminary injunction on April 24, 2025, finding the directive was likely “vague, viewpoint discriminatory, and unlawfully imposed new legal obligations.”13Duke Law Campus Speech Project. National Education Association v. U.S. Department of Education The department rescinded the guidance entirely in February 2026, and the court issued a final ruling permanently invalidating the letter and barring future enforcement. The case terminated on February 23, 2026.14CourtListener. National Education Association v. U.S. Department of Education
AFT v. Department of Education
A parallel suit filed February 25, 2025, by the American Federation of Teachers, the American Sociological Association, and AFT-Maryland (Case No. 1:25-cv-00628-SAG) produced a preliminary injunction from Judge Stephanie A. Gallagher on April 24, 2025.15Duke Law Campus Speech Project. American Federation of Teachers et al. v. U.S. Department of Education On August 14, 2025, Judge Gallagher issued a final judgment vacating both the Dear Colleague Letter and a related April 3, 2025, certification requirement, ruling the actions “unconstitutional, unlawful, and issued in violation of the Administrative Procedure Act.” The department dropped its appeal on January 22, 2026.
Frozen COVID Relief Funds
On March 28, 2025, Secretary McMahon rescinded previously approved spending extensions under the Elementary and Secondary School Emergency Relief (ESSER) program, the Homeless Children and Youth program, and Emergency Assistance to Nonpublic Schools. Seventeen jurisdictions, led by New York, sued in the Southern District of New York. On May 6, 2025, Judge Edgardo Ramos issued a preliminary injunction restoring access to the funds, which in New York alone unlocked $134 million.16New York Attorney General. Attorney General James Wins Court Order Restoring Critical Education Funds17Chalkbeat. Judge Orders Education Department to Restore Pandemic Relief Money
The Second Circuit denied the government’s stay on June 10, 2025, and on August 11, 2025, approved the parties’ stipulated withdrawal of the appeal. The case was formally settled on November 17, 2025.18Oregon Department of Justice. ESSER Funding Terminations — New York v. U.S. Department of Education
The $6.8 Billion Funding Freeze
On July 14, 2025, a coalition of 22 Democratic attorneys general and two Democratic governors sued in the U.S. District Court of Rhode Island to force release of $6.8 billion in congressionally approved education funding that had been scheduled to go out on July 1, 2025. The frozen funds covered seven programs, including Title II-A teacher professional development ($2.2 billion), Title IV-B before- and after-school programs ($1.4 billion), Title IV-A academic enrichment ($1.3 billion), English-learner services ($890 million), adult literacy ($715 million), and migrant education ($375 million).19Education Week. Two Dozen States Sue Trump Over $6.8 Billion School Funding Freeze Plaintiffs alleged the administration violated the 1974 Impoundment Control Act by withholding appropriated money without following the required rescissions process.
The administration released the funds in August 2025, and the parties filed a joint motion to dismiss on August 25. The Rhode Island Attorney General’s office called the release a “major win.”20Rhode Island Attorney General. Education Funding Freeze A related suit brought by school districts and families, Anchorage School District et al. v. Department of Education et al., remains active in the same court.21Democracy Forward. Ed Funding Win Statements Reporting from June 2026 indicates the disruption continues to affect school budgets, and the White House budget office has reportedly blocked more than $2 billion in additional education funds as of May 2026.
Civil Rights Complaints: The Carter Case
On March 14, 2025, parents with pending civil rights complaints and the Council of Parent Attorneys and Advocates filed Carter et al. v. United States Department of Education (Case No. 1:25-cv-744) in the District of Columbia. The plaintiffs allege that the mass layoffs and regional office closures froze the investigation of discrimination complaints in violation of the Administrative Procedure Act and the Equal Protection Clause, and that the investigations still moving forward were being selected based on complainants’ race, sex, and gender.22National Center for Youth Law. Carter v. U.S. Department of Education
The case has expanded through two amended complaints filed in April 2025 and January 2026. On January 5, 2026, the department rescinded its March 2025 reduction-in-force. As of April 2026, the parties were negotiating a potential settlement, and the case remains open.
The October 2025 Shutdown Layoffs
During a 15-day government shutdown in October 2025, the administration issued a second round of reductions in force. At the Department of Education, 466 employees, more than 20 percent of remaining staff, received layoff notices on October 10, 2025.23Government Executive. Substantial Layoffs Begin at Federal Agencies, White House Says At least 4,200 workers across seven agencies were affected.
The American Federation of Government Employees and AFSCME sued. On October 15, 2025, U.S. District Judge Susan Illston granted a temporary restraining order blocking the layoffs, finding the plaintiffs were likely to prove the administration’s actions were “both illegal and in excess of authority” and stating from the bench that “overturning agency mandates Congress has put in place — they can’t do that.”24NPR. Government Shutdown Federal Employees Congress RIF The order was later extended and expanded to cover employees represented by additional unions across every cabinet department and 24 independent agencies.25AFGE. Shutdown Update: 5 Things to Know This Week
The November 2025 Inter-Agency Transfer Suit
On November 25, 2025, a coalition of educators, school districts, unions, and the NAACP filed a new lawsuit challenging the administration’s plan to transfer the department’s remaining functions to the Departments of Labor, Health and Human Services, Interior, and State. The plaintiffs argue that the annual appropriations law enacted by Congress requires the Department of Education to carry out its own programs, and that Secretary McMahon lacks authority to offload those functions through inter-agency transfers.26The New York Times. School Coalition Lawsuit Education Department27EdSource. Lawsuit Challenges Trump Administration’s Plan to Dismantle the Education Department
The 2026 Student Loan Rule Challenge
The newest front involves a department rule redefining which graduate degrees qualify as “professional degrees” for federal student loan borrowing limits. Published on May 1, 2026 (91 Fed. Reg. 23,768), the rule narrows the definition established under the “One Big Beautiful Bill Act” (H.R. 1) and effectively excludes physical therapy, occupational therapy, physician assistant, and advanced nursing programs from higher loan limits of $50,000 annually and $200,000 in aggregate. The rule also strips grandfathering protections from students who transfer schools or withdraw and re-enroll.28Supreme Court of the United States. State of Maryland et al. v. United States Department of Education — Court Filing
On May 19, 2026, 25 states and the District of Columbia filed State of Maryland et al. v. United States Department of Education (Case No. 1:26-cv-01957-ABA) in the U.S. District Court for the District of Maryland before Judge Adam Abelson. The complaint raises four counts under the Administrative Procedure Act, alleging the rule exceeds statutory authority and is arbitrary and capricious. As of June 2026, plaintiffs had not moved for a preliminary injunction, leaving the rule set to take effect on July 1, 2026.
Where the Cases Stand
As of mid-2026, the picture is mixed. Both Dear Colleague Letter cases ended in permanent invalidation of the DEI directive. The ESSER and $6.8 billion funding freeze cases resolved after the administration released the money. The Carter civil rights case is in settlement talks. Judge Illston’s TRO continues to block the October 2025 shutdown-era layoffs. The inter-agency transfer suit filed in November 2025 and the student loan rule challenge filed in May 2026 are in early stages.
The central case, though, remains unresolved. After the Supreme Court’s July 2025 stay in McMahon v. New York, the underlying merits proceedings continue in the First Circuit, and the administration can keep executing its reduction-in-force and program transfers in the meantime. The larger constitutional question, whether a president can effectively shut down a cabinet department Congress created, has not been answered.