On May 6, 2025, Judge Edgardo Ramos of the United States District Court for the Southern District of New York issued a Preliminary Injunction Order, barring the United States Department of Education from blocking States’ access to American Rescue Plan Act funding. What practical impact will the Preliminary Injunction Order have on Pennsylvania school districts, charter schools, intermediate units, and career and technical centers?
Background
Earlier this year, the United States Department of Education (“USDE”) granted Pennsylvania an extension to access hundreds of millions of dollars in funding previously awarded to public and private K-12 students through the American Rescue Plan Act (“ARPA”).
However, on March 28, 2025, without warning, the USDE and the Secretary of Education, Linda McMahon, issued a letter (the “Recission Letter”), revoking the extension and declaring that the period for accessing the funds had expired. (See SLB 412 for additional information.)
The revoked funding included approximately $183.6 million owed to Pennsylvania school districts, charter schools, intermediate units, and career and technical centers and $1.8 million owed to the Pennsylvania Department of Education (“PDE”).
Generally, these funds were used to support critical programs for Pennsylvania schools, including academic and mental health needs, technology updates, and infrastructure to ensure the health and safety of students. While PDE immediately advised schools to put their projects on hold, in many cases, the promised monies had already been advanced by the schools, relying on eventual reimbursement.
In his April 10, 2025 press release, Pennsylvania Governor Josh Shapiro explained that the abrupt cancelling of the funds “left Pennsylvania taxpayers on the hook” and “will weaken Pennsylvania’s schools infrastructure.”
The Lawsuit
On April 10, 2025, Governor Shapiro joined a coalition of fifteen (15) other States and the District of Columbia to sue USDE and Linda McMahon on the basis that the Recission Letter violated the Administrative Procedure Act.
In the States’ 55-page Complaint, they emphasized that USDE’s revocation of funds “triggered chaos for state education departments…and local school districts” and that “the result of [USDE’s] recission is a massive, unexpected funding gap that is causing serious harm to the public, cutting off vital education services, all to the detriment of the students whom Congress intended to benefit.”
Specifically discussing the impact on Pennsylvania school communities, the Complaint stressed that USDE’s recission of funding “has harmed PDE, Pennsylvania schools, and taxpayers” and that “Pennsylvania schools and students will continue to suffer from the lack of appropriate physical facilities and will not benefit from the programs designed to address learning loss,” a primary goal of the post-COVID era funding programs.
The Preliminary Injunction Order
On May 6, 2025, the States secured a significant victory for their education departments and school communities. Judge Edgardo Ramos of the United States District Court for the Southern District of New York issued a Preliminary Injunction Order, which temporarily bars USDE from blocking the States’ access to ARPA funding during the litigation of the case or until further order of the Court is made.
Bottom Line For Schools
The practical impact of the Preliminary Injunction Order is that the States, including Pennsylvania, now have access to the critical ARPA funding until further notice. Schools are encouraged to remain cautiously optimistic, as the litigation continues and an appeal by USDE may be imminent.
Some schools may wonder if they should fast track projects and payment applications to ensure access before there are any further developments. We will continue to monitor this issue, but encourage school administrators to contact their local legal counsel or one of the education attorneys at KingSpry with any questions.
