When funding cuts reach the classroom: three states sue over special-education grants

Three US states are taking the federal government to court over the money that trains special-education staff. On 9 June 2026, California, Rhode Island, and Wisconsin sued the US Department of Education, claiming it cut grants that pay to train the people who teach and support students with disabilities. The case is now before the US District Court for the Northern District of California, and it turns on a dry but consequential question: can a federal agency cancel funding mid-cycle without following the process the law requires?

This is a report on the lawsuit and what the grants do. We are not assessing who should win.

What the grants fund

The money at the centre of the case comes from the State Personnel Development Grant program, run under the Individuals with Disabilities Education Act, the federal law that guarantees students with disabilities a free and appropriate public education. These grants are not direct payments to families or classrooms. They fund the workforce behind special education: professional development and training for special-education teachers, aides, and the support staff who deliver services to children with disabilities.

In practice, that is the training that helps a teacher carry out an individualized education program, support a student with a reading disability, run a classroom that includes students with significant support needs, or use assistive technology well. The grants are a long-running part of how the IDEA system builds and keeps qualified staff. Squeeze that pipeline and the effect eventually lands on students, in the form of fewer trained adults who know how to support them.

What the states say happened

According to the complaint, the department sent all three states near-identical notices of non-continuation on 5 September 2025, discontinuing the funding at the end of the operative budget period. Each state was partway through a five-year award when the money stopped: Rhode Island’s ran from 2021, California’s from 2022, Wisconsin’s from 2024. California, for example, was awarded $2.1 million a year over five years and received three years of it. The states say the grants were flagged because their applications referred to diversity, equity, and inclusion, and that the current administration’s priorities carry, in the complaint’s words, “a reflexive hostility to any reference, no matter how fleeting,” to those subjects. Those references sat in applications submitted in 2021, 2022, and 2024, at a time when the department’s own application packages required applicants to address equity under the General Education Provisions Act equity directive.

Most of the claim is procedural. Three of the six counts are brought under the Administrative Procedure Act, the US law that requires major federal policy changes to go through a formal notice-and-comment process before taking effect. The states say the new funding priorities were applied without that notice and against the agency’s own regulations. That is the heart of the case as the states frame it: not whether the department can ever change priorities, but whether it followed the required steps to do so.

One count reaches past procedure. The states also plead the Spending Clause of the US Constitution, which puts the power to direct federal spending with Congress rather than the executive. The remaining two counts are equitable ultra vires and declaratory judgment. The case is captioned California, et al. v. U.S. Department of Education, and it names Education Secretary Linda McMahon in her official capacity alongside the department itself.

We are reporting the states’ allegations as allegations. The department has answered publicly. A spokesperson, Amelia Joy, told K-12 Dive that the administration has made “historic investments to support students with disabilities and will continue to help states expand proven learning methods that produce stronger results,” and said the department remains committed to delivering the services children with disabilities are entitled to under federal law. A judge will weigh both accounts. What the grants fund is a matter of record; who is right about the cancellation is what the litigation will decide.

Why it matters beyond three states

State-level funding fights can feel remote, but this one touches a structural point. Special education in the US leans heavily on a chain of federal funding, state administration, and trained staff. The State Personnel Development Grants sit at the staff-training link in that chain. A challenge to how those grants can be cut, and on what grounds, is really a question about how stable the funding for special-education staffing is when federal priorities shift.

For families of students with disabilities, the stakes are concrete. The quality of a child’s education depends substantially on whether the adults around them are trained to teach and support them. Funding that trains those adults is not a back-office line item. It is upstream of what happens in the classroom.

The Canadian frame

Canadian readers should know the systems are built differently, so this specific fight has no direct Canadian twin. In Canada, education is a provincial and territorial responsibility, and special education is funded and delivered through provincial ministries and school boards, not through a single federal grant structure like IDEA. There is no Canadian equivalent of a federal Department of Education cancelling a national special-education training grant, because the federal government does not run school funding the way Washington does.

What the two systems share is the reality the lawsuit points to: special education runs on trained people, and when the funding that trains them is unstable, students feel it. That is true in Regina and Providence alike, whatever the mechanism moving the money.

What to watch

The concrete takeaway: California, Rhode Island, and Wisconsin have asked a federal court to restore special-education staff-training grants that were cut mid-cycle, arguing the cut skipped a legally required process. The grants fund professional development for the teachers and staff who support students with disabilities under IDEA. The case is filed and pending in the Northern District of California. We will report the court’s decision when it comes, and we are not predicting the result.

Sources

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