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The Trump administration improperly cut off tens of millions in grant funding from New York City’s public schools, a judge found this week, money that was yanked because of city policies protecting transgender students.
Manhattan federal Judge Arun Subramanian ruled that federal officials sidestepped required procedures that apply when cutting off funding under Title IX, which prohibits sex discrimination at educational entities that receive federal funding.
The case is notable because it is the first known attempt by the Trump administration to cancel funding for New York City’s public schools under its contested interpretation of civil rights laws. It also represents a setback in the administration’s efforts to control school policies across the country on major culture war issues, including trans rights. Grants for school districts in Chicago and Fairfax, Virginia, were also discontinued.
The Trump administration held up funding to New York City through the U.S. Department of Education’s Magnet School Assistance Program, citing Title IX, which prohibits sex discrimination at educational institutions receiving federal funding. Officials argued city policies that allow transgender students to participate in sports and use bathrooms and other school facilities in line with their gender identity violate those civil rights protections.
“When recipients of Federal funding require schools to treat ‘trans-identifying’ males as if they were ‘females,’ including in intimate traditionally sex-separate facilities, they defeat the very purpose of Title IX: to ensure equal opportunities for women while not jeopardizing their privacy, safety, or other rights,” Trump administration officials wrote to the city’s Education Department in September.
To keep the grant funding, federal officials pressured the city to overhaul their policies on transgender students. The city Education Department sued in October, arguing that revoking the magnet grant funding put “politics before public schools” and had no “valid substantive basis.” At stake is about $36 million in multi-year grants across 19 local public schools.
But in response to the city’s lawsuit, federal officials argued that they have discretion to withhold the funding and were not relying on Title IX. Officials must typically hold a hearing and file written reports with Congress, among other requirements, before withholding money under Title IX.
“It is undisputed both that defendants did not follow these statutory procedures, and that the procedures would apply if they non-continued the grants because of Title IX violations,” Subramanian wrote. The argument that the Trump administration was not relying on Title IX to withhold the money “flies in the face of the record.”
Subramanian’s decision did not address whether New York City’s policies violate Title IX — and it will likely not be the last word in this case. He ordered the Trump administration to make a new determination within 10 days about whether to continue the grants. If federal officials want to rely on Title IX, they must follow the correct procedures, he wrote.
Representatives of the federal Education Department did not respond to a request for comment.
The multi-year magnet grant funding is designed to help spur racial integration on several campuses by launching a range of new programs, including in journalism, math, science, performing arts, and civic activism, according to the city’s lawsuit.
Some legal observers said the favorable ruling for the city could embolden other school districts to push back against federal demands.
“We’ve seen the Trump administration take an ‘act first, ask for forgiveness’ approach, and that’s come back to hurt them,” including with universities, said Christopher Thomas, an assistant professor of educational leadership and policy at the University of Florida.
He noted that aggressive legal action from the Trump administration can create a chilling effect among districts who may be wary of taking on the federal government.
“Hopefully decisions like this can thaw that chill,” he said.
The litigation included a related dispute about whether the Trump administration could claw back unspent magnet grant money from prior years. Federal officials ultimately agreed to allow the city to spend about $11 million in carryover funding, leaving about $36 million in doubt.
City officials did not respond to a request for comment.
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The Trump administration has also pursued other avenues to pressure New York City to rethink its policies on transgender students. It launched a civil rights investigation in January into whether the city’s policies on transgender students’ access to sports violates Title IX. (Seventeen other educational institutions with similar policies were also under investigation.)
Federal officials did not respond to questions about the status of that investigation.
While the New York decision does not directly restore funding, it’s significant because Subramanian rejected the administration’s argument that the district court didn’t have jurisdiction and that the case belonged in a separate federal claims court that typically resolves contract disputes.
Following a Supreme Court decision last year involving National Institutes of Health grants, the administration has argued and some judges have agreed that lawsuits related to canceled grants should go through the claims court.
A similar legal argument is playing out in the 4th Circuit U.S. Court of Appeals after the Trump administration withheld money from five northern Virginia school districts that had transgender inclusion policies similar to New York City’s.
“What is happening in these school districts is not a contract question,” said Mary Rohmiller, an attorney and Title IX specialist who previously worked for the federal Education Department. “They are not asking the court to make the Department of Education give them money. They are asking the court to stop the Department of Education from imposing its unlawful interpretation of Title IX on them. And that is a question for a federal court to answer.”
The administration could still try to withhold money from New York City, but they would need to show a plausible reason for not continuing the grants that is not arbitrary and capricious, Rohmiller said.
National editor Erica Meltzer contributed.
Alex Zimmerman is a senior reporter for Chalkbeat New York, covering NYC public schools. Contact Alex at azimmerman@chalkbeat.org.