Federal Judge Voids Education Department Directive, Restoring $600 Million in Teacher-Training Grants

On September 17, 2026, U.S. District Judge Angel Kelley struck down a Department of Education directive that had abruptly canceled more than $600 million in federal teacher-training grants. The ruling declared the agency's actions "arbitrary and capricious" under the Administrative Procedure Act, effectively voiding a policy that targeted programs associated with diversity, equity, and inclusion (DEI) initiatives.[1][2]

The decision revives funding pathways for the Teacher Quality Partnership and the Supporting Effective Educator Development programs. These federal initiatives are explicitly designed to recruit, prepare, and retain K-12 teachers in high-need subjects, including special education and early childhood instruction. When the Department of Education issued its termination directive in February 2025, it wiped out more than 90 percent of the awards issued under these programs, affecting 109 grants across the country.[2][3]

In her ruling, Judge Kelley noted that the federal government failed to provide discernible criteria for what constituted a "DEI" program or a "divisive ideology." The court found that the agency bypassed mandatory public notice and comment periods, issuing the cuts without a clear regulatory framework. "Rather than confining the Directive to actions that are traditionally understood to constitute discrimination, the record instead reflects that Defendants terminated grants with topics such as 'acknowledging … racism' and 'anti-racism'—activities expressly undertaken to oppose discrimination," Kelley wrote.[1][3]

The court also emphasized that the Department of Education ignored how heavily states, universities, and local school districts relied on the funding to maintain their educator pipelines. The abrupt loss of $600 million forced many institutions to scale back or suspend their training cohorts entirely. "The Directive does not acknowledge the fact that thousands of teachers, as well as teachers in teacher-training pipelines, would be affected, upending the careers of much-needed educators," Kelley wrote in the decision.[1][2][3]

The legal challenge was spearheaded by a coalition of eight Democratic-led states, including California, Massachusetts, and New Jersey. These states argued that the canceled grants were essential for addressing severe teacher shortages and improving retention in schools that historically struggle to fill positions. Forty of the 109 terminated grants were awarded to universities and nonprofits within these eight states, directly impacting their local workforce development.[2]

The Department of Education had previously defended the cuts by stating the funds were being used to train educators on "inappropriate and unnecessary topics." According to a February 2025 agency release, the targeted training materials included instruction on social justice activism, critical race theory, and white privilege. The administration maintained that taxpayer dollars should not support these frameworks, prompting the sweeping cancellations.[1]

While the ruling voids the cancellation directive, the mechanism for recovering the lost funds remains complex. Judge Kelley specified that institutions and states seeking direct financial compensation for the terminated grants must pursue those claims in the U.S. Court of Federal Claims, a specialized venue that handles monetary disputes involving the federal government. This means the $600 million will not automatically reappear in university bank accounts overnight.[2]

The decision marks a significant turning point in a year-and-a-half-long legal battle over federal education spending. In April 2025, the U.S. Supreme Court had allowed the administration to proceed with the grant terminations while the litigation continued in lower courts, putting an earlier injunction on hold. Now, with the underlying policy officially struck down on administrative grounds, educator preparation programs have a legal basis to rebuild the training infrastructure that was dismantled last year.[1][2][3]