On June 26, 2025 the U.S. Department of Education (USDE) reversed prior guidance that canceled spending extensions for federal K-12 pandemic relief funds. States that were preapproved for the extended spending deadlines can now request reimbursements and liquidate their funds.
In a letter to states not suing over the USDE’s withholding of the funds, Education Secretary Linda McMahon said the pending litigation “has created basic fairness and uniformity problems” among states. This situation concerns access to school district funds preapproved for extended spending deadlines under the Elementary and Secondary School Emergency Relief program and other COVID emergency aid programs for schools.
A May 6 preliminary injunction prevented the agency from canceling those reimbursements for the 16 Democratic-leaning states that, along with the District of Columbia, sued the USDE for withholding the funds. Thus, they had been able to continue to draw down their ESSER funds. However, the states not involved in the litigation could not withdraw funds. McMahon’s letter clarifies that now all states and outlying areas that were preapproved for late liquidation prior to March 28, 2025 can do so.
The secretary also noted that all late liquidation funding requests will be carefully reviewed to ensure they relate to pandemic recovery efforts and indicated the USDE’s desire to reinstate the March 28th policy change that withheld funds for late liquidation until states reapplied and were approved for reimbursements. The final policy will depend on court decisions.
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