Discontinued federal grant funding for expanding social services and improving student attendance in more than a dozen Illinois school districts will be partially reinstated—but a messy legal battle over tens of millions more grant dollars nationwide is far from over.
The U.S. Department of Education has reached an agreement with the nonprofit ACT Now Illinois to restore $6 million in Full-Service Community Schools grant funds through June 30, lawyers for both sides announced Thursday during a status hearing in federal court. ACT Now distributes federal funds for community schools efforts to 32 school buildings in 16 districts across the state.
The department in December told recipients of 19 Full-Service Community Schools grants that the agency had, effective immediately, discontinued their ongoing grant funds worth at least $168 million in total.
For Illinois, that announcement effectively cut off $17 million in previously unspent funds ACT Now had already received, as well as $56 million ACT Now had expected to receive for the remaining two years of the grant.
Now the Illinois grantees will regain access to a portion of those carryover funds for the remainder of the school year. The rest of the carryover funds, and the additional two years of funding, remain in limbo.
Schools use Full-Service Community Schools grants to pay for a wide variety of projects centered on the goal of strengthening supports for students, schools, and their surrounding communities.
In the three months since the Illinois programs received word their grants had been scrapped, schools have shuttered roughly 150 after-school programs, canceled close to 200 initiatives to supply students and families with food, and laid off or reassigned more than 200 staff members, according to a report ACT Now published last month.
Career-and-technical education programs are also at risk. One school staff member surveyed by ACT Now said the cuts threaten the jobs of career coaches and would cause the district’s CTE programs to be “demolished.”
Regaining access to $6 million in carryover funds won’t cover all the expenses schools had anticipated federal funding would cover this year, said Susan Stanton, the executive director of ACT Now Illinois. Staff members who lost their jobs may have already moved on or might be wary of returning only temporarily.
But the assurance of funding for four more months will help Illinois schools stabilize their programming while the broader legal battle plays out nationwide, according to Stanton.
“I think today provides a brief exhale for the programs we’ve been working with,” Stanton said Thursday after the status hearing. “We’ve obviously been in crisis mode for the past few weeks, which is no way to be able to run a school or serve children.”
Programs in close to a dozen other states have faced similar challenges in recent weeks.
For instance, the discontinuation of a Community Schools grant has disrupted ongoing efforts in Kentucky’s Warren County school district to reduce chronic absenteeism, jeopardized a planned partnership with a local anti-vaping nonprofit, and scuttled plans to remodel an elementary school playground for community use on nights and weekends.
In Illinois, one school official told Stanton the district could no longer afford to host weekly laundromat get-togethers where low-income families mingled with educators.
“You can see ripple effects from losing something that specific and that crucial,” Stanton said. “God forbid somebody’s losing mental health or behavioral health services that can be throwing kids into crisis.”
A spokesperson for the Education Department didn’t respond to a request for comment.
Grants for community schools initiative remain in limbo
As part of a broader crackdown on federal spending, the Department of Education on Dec. 12 abruptly halted 19 ongoing Full-Service Community Schools grant awards that were set to expire in 2027 and 2028. Letters from Murray Bessette, a Trump appointee, cited language from grantees’ application materials that referenced diversity, equity, inclusion, and related terminology the Trump administration has moved to eradicate.
Numerous recipients contested the cancellations, but the department swiftly rejected all appeals. Shortly after that, though, the department announced it would voluntarily restore all $28 million in discontinued funding for the Community Schools grant in Idaho.
With Idaho’s grant restored, and this week’s agreement over the two Illinois grants, that leaves 16 other Community Schools grants—collectively worth at least $84 million—that remain discontinued.
Last Friday, recipients of four of those grants—in Kentucky, New Jersey, and New York—joined a separate ongoing lawsuit challenging the cuts. The attorneys general of Maryland, North Carolina, and the District of Columbia are pursuing a third distinct legal challenge of the cuts in their respective jurisdictions.
All told, recipients of 11 of the 19 canceled grants are contesting the cuts across three separate federal lawsuits.
Grantees in California, Connecticut, Texas, and Wisconsin aren’t currently represented in litigation—though Connecticut officials have floated using state funds to pay for continuing the programs affected by federal cuts.
Federal investments in Full-Service Community Schools aren’t petering out altogether. The department previously said it had rerouted the money it pulled back from the terminated grants to the roughly 50 ongoing Community Schools awards that were unaffected by the Trump administration’s cuts.
Meanwhile, Congress recently approved a federal budget that includes level year-over-year funding of $150 million for the program.
But the future for grantees remains uncertain. Current recipients of Full-Service Community Schools may now fear their grants getting cut in future rounds of spending changes implemented by the Trump administration. The Education Department also recently announced it plans to shift the day-to-day execution of the Community Schools grant program to the U.S. Department of Health and Human Services.
The department hasn’t yet revealed the specifics of that transition.
In the meantime, a judge is still considering the merits of the grant cuts ACT Now is challenging, and the other two court cases are still unfolding.
“I’m really hopeful that Illinois and this lawsuit can start leading the way in getting relief for these other folks,” Stanton said. “We’re trailblazing and paving the way to saving this program across the country.”
2026-03-05 19:33:55
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