On March 28, 2025, the U.S. Department of Education Secretary (“ED”) announced in a rescission letter to the state chiefs of education that the department ended the liquidation period for programs under the Education Stabilization Fund (ESF), Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act of 2021, and American Rescue Plan (ARP) effective March 28, 2025.
On April 10, 2025, State of New York et al filed a legal case against the Linda McMahon, United States Department of Education (Case 1:25-cv-02990-ER) under the Administrative Procedures Act/Review or Appeal of Agency Division in the Southern District of New York.1 Read more here.
Below are key dates and activities related to the case2
| Date | Activity | Legal Document Number |
|---|---|---|
| April 10, 2025 | Case Filed | 1 |
| April 11, 2025 | Plaintiffs' Motion for Preliminary Injunction | 11 |
| April 11-28, 2025 | Supporting Declarations Filed | 12-28 |
| April 28, 2025 | Defendants' Memorandum of Law in Opposition to Plaintiffs' Motion for Preliminary Injunction | 63 |
| April 30, 2025 | Pro Hac Vice Motions Filed | 70-72 |
On May 6, Judge Ramos issued a Preliminary Injunction Order3 with the following orders:
- The Defendants (“ED”) are temporary prohibited from enforcing or implementing as against Plaintiffs (15 states and the District of Columbia) during the pendency of this litigation or until further order of the Court the directives in the March 28, 2025, letter from Education Secretary Linda McMahon to State Education Chiefs, Doc. 1-1 (“Letter”), which includes:
(a) rescinded the prior approvals granted by the U.S. Department of Education (“ED”) extending the periods of time for Plaintiff to liquidate their obligations under the Education Stabilization Fund, as that term is defined in the Letter (“ESF”), and
(b) modified Plaintiffs’ periods to liquidate their obligations under the ESF to expire as of 5:00pm ET on March 28, 2025.
- The U.S. Department of Education is preliminarily prohibited from modifying ED’s previously approved periods for Plaintiffs to liquidate their obligations under the ESF without giving the plaintiffs at least 14 days' notice before the modification takes effect.
- The U.S. Department must provide written notice of this Order to all personnel within ED. The written notice shall instruct all personnel that they must comply with the provisions of this Order. Defendants must file a status report within three (3) days of this Order, evidencing that all personnel within ED have received this notice.
The order applies to the 15 states and District of Columbia that participated in the lawsuit, which include:
- Arizona
- California
- Delaware
- District of Columbia
- Hawaii
- Illinois
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Nevada
- New Jersey
- New Mexico
- New York
- Oregon
- Pennsylvania
Our team is monitoring the legal process and is available to assist impacted entities with funding questions and next steps. If you have any questions or need assistance, please reach out to a professional at Forvis Mazars.