LAMF
LAMF

Trump administration to release over $5 billion school funding that it withheld

Early in July, the Trump administration said it would not release funding previously appropriated by Congress for schools and that an initial review found signs the money was misused to subsidize what it alleged was "a radical leftwing agenda."
July 26, 2025 / 08:16 IST
The Trump administration has threatened schools and colleges with withholding federal funds over issues like climate initiatives, transgender policies, pro-Palestinian protests against U.S. ally Israel's war in Gaza and diversity, equity and inclusion practices.

President Donald Trump's administration will release more than $5 billion in previously approved funding for K-12 school programs that it froze over three weeks ago under a review, which had led to bipartisan condemnation.

KEY QUOTES

"(The White House Office of Management and Budget) has completed its review ... and has directed the Department to release all formula funds," Madi Biedermann, deputy assistant secretary for communications at the U.S. Education Department, said in a statement, adding funds will be dispersed to states next week.

Further details on the review and what it found were not shared.

A senior administration official said "guardrails" would be in place for the amount being released, without giving details.

WHY IT'S IMPORTANT

Early in July, the Trump administration said it would not release funding previously appropriated by Congress for schools and that an initial review found signs the money was misused to subsidize what it alleged was "a radical leftwing agenda."

States say $6.8 billion in total was affected by the freeze. Last week, $1.3 billion was released.

CONTEXT

After the freeze, a coalition of mostly Democratic-led states sued to challenge the move, and 10 Republican U.S. senators wrote to the Republican Trump administration to reverse its decision.

The frozen money covered funding for education of migrant farm workers and their children; recruitment and training of teachers; English proficiency learning; academic enrichment and after-school and summer programs.

The Trump administration has threatened schools and colleges with withholding federal funds over issues like climate initiatives, transgender policies, pro-Palestinian protests against U.S. ally Israel's war in Gaza and diversity, equity and inclusion practices.

REACTION

Republican U.S. lawmakers welcomed the move on Friday, while Democratic lawmakers said there was no need to disrupt funding in the first place.

Education Secretary Linda McMahon separately said she was satisfied with what was found in the review and released the money, adding she did not think there would be future freezes.

Reuters
first published: Jul 26, 2025 08:16 am

Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Subscribe to Tech Newsletters

  • On Saturdays

    Find the best of Al News in one place, specially curated for you every weekend.

  • Daily-Weekdays

    Stay on top of the latest tech trends and biggest startup news.

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347