NC attorney general secures $2.5M in ongoing lawsuit over federal school cuts

T. Keung Hui, The News & Observer on Mar 11, 2026

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North Carolina Attorney General Jeff Jackson announced Wednesday an agreement to restore $2.5 million of the $50 million in federal education funding cut from 18 Tar Heel school districts.

The Democratic attorney general had filed a federal lawsuit in December accusing the U.S. Education Department of unlawfully terminating $50 million in Full-Service Community Schools grants that were being used in schools across North Carolina.

Jackson said he had secured an agreement to restore $2.5 million in grant funding for the remainder of the school year. Jackson said the Education Department will allow the schools to continue using previously awarded grant funds through June 30 while the lawsuit continues.

“This is a good outcome for our students — but not the final step in our fight,” Jackson said in a news release. “Schools and students will continue to get much-needed funding they were promised ... while we continue this case.”

Schools accused of promoting DEI

On Dec. 12, the Education Department announced it was canceling $168 million in community schools grants even though the funding was already approved by Congress. The grants were approved in 2023 under the Biden administration.

The Education Department said its reason for canceling the community schools grants is that they promoted diversity, equity and inclusion, which the Trump administration maintains is against federal law.

A similar reason was given last year to cancel multiple federal education grants, including those for teacher training and school-based mental health programs.

The North Carolina grant was awarded to Duke University to serve 55 schools in 18 districts in a project called the North Carolina Community Schools Coalition. The grant application makes multiple references to “systemic racism” and “structural racism” and mentions providing teachers with “racial equity training.”

The grant supported approximately 23,000 North Carolina students, including in Durham and Orange counties and in counties heavily impacted by Helene. It was used for things such as funding mental health support and after-school programs

North Carolina was joined by Maryland and the District of Columbia in the lawsuit filed in U.S. District Court in Maryland.

Jackson has filed multiple lawsuits against the Trump administration, including after the Education Department froze $6.8 billion in education funding. The lawsuit was dropped after the money was released, including $168 million for North Carolina schools.