Coalition of 15 States Files "Protective" Lawsuit to Block Impending School Mental Health Grant Terminations
A major legal and administrative showdown has erupted over the future of $1 billion in school-based mental health grants funded by the 2022 Bipartisan Safer Communities Act. Despite an active federal court injunction preventing the Trump administration from stopping the five-year grants, the U.S. Department of Education is seeking to permanently end the funding by exploiting a different section of administrative law. In response, a coalition of 15 states led by Washington Attorney General Nick Brown filed a new, "protective" lawsuit in the U.S. District Court for the Western District of Washington on July 10, 2026, to secure a new injunction before a critical July 31, 2026 deadline.
The Administrative Law Dispute: "Termination" vs. "Discontinuation"
The conflict centers on the Department of Education's attempt to bypass a December 19, 2025 federal court injunction. The department had initially tried to "discontinue" the grants under 34 C.F.R. § 75.253, arguing that the programs' focus on diversity, equity, and inclusion (DEI) fell afoul of the administration's civil rights policies. After a federal appeals court ruled that the government had failed to follow correct procedures and ordered the funds released, the department only awarded six months of funding and added new administrative hurdles for grantees.
Now, the department is asserting that it can still permanently end the grants by "terminating" them under a separate regulation, 2 C.F.R. § 200.340, which governs grant terminations as opposed to non-continuations into subsequent calendar years. In a motion filed on June 10, 2026, the department argued:
"The Department does not believe that a decision to terminate a grant agreement, as distinguished from a decision not to continue a multi-year grant agreement into a subsequent calendar year, is affected by the Court’s December 19, 2025 injunction."
A federal district court hearing is scheduled for July 24, 2026, to evaluate whether "termination" and "discontinuation" are legally distinct under the current injunction. If the court rules in the department's favor, the Department of Education intends to begin ending the grants as early as July 31, 2026.
The 15-State Coalition's "Protective" Counter-Offensive
To prevent a sudden defunding of K-12 mental health services, the 15-state coalition filed a new, separate lawsuit on July 10, 2026 (State of Washington v. United States Department of Education, W.D. Wash., 2:26-cv-02409). By filing this protective action, the states—including Washington, Connecticut, Illinois, Michigan, and Wisconsin—hope to secure a fresh preliminary injunction specifically blocking the department's new "termination" strategy under 2 C.F.R. § 200.340 before the July 31, 2026 deadline.
State officials have warned of devastating consequences if the funding is lost. The $1 billion nationwide program has supported the hiring of 1,300 school mental health professionals and served approximately 775,000 K-12 students. In Connecticut, Attorney General William Tong criticized the administration's persistent efforts to claw back the funds:
"Trump is taking money meant for our kids to bankroll ballrooms and tax breaks for billionaires. We’re going to keep fighting for as long as it takes to stop this cruelty and chaos."
Grantees, such as the University of Connecticut, which received a $3 million grant to support graduate social work students in high-need districts, have reported that participating schools saw suicide rates cut in half and significant reductions in problematic student behaviors.
The states argue that the Department of Education cannot use 2 C.F.R. § 200.340 to bypass congressional appropriations or the court's prior rulings, and that the new termination notices are arbitrary, capricious, and contrary to law.