Kelley’s decision found that the Education Department’s February 2025 directive, which labeled the grants as supporting “divisive ideologies” such as diversity, equity and inclusion (DEI) initiatives, violated federal law because the agency failed to provide required notice or solicit public comment before acting.
The contested cuts targeted funding for the Teacher Quality Partnership and Supporting Effective Educator Development programs, affecting more than 100 initiatives that aim to alleviate teacher shortages in subjects like math, science and special education.
In her order, Kelley emphasized that the reliance interests of states, school districts, teachers, principals and students were “many, substantial, and deep‑rooted,” and that the abrupt reduction ignored the critical role the grants play in retaining educators beyond five years.
While the ruling does not automatically restore the withheld funds, Kelley directed that any effort to recover the money must be pursued in the Court of Federal Claims.
The Education Department did not respond to a request for comment. The lawsuit was brought by eight Democratic‑led states, which argue the cuts were motivated by a political agenda to eliminate DEI programs rather than fiscal necessity.
Earlier, a federal appeals court in Boston had temporarily halted the cuts, and the administration’s appeal to resume them was rejected. In April 2025, the Supreme Court allowed the government to proceed with the reductions while the litigation continues, noting that states could keep the programs running using their own resources in the interim.