A federal judge in Boston on Thursday struck down a U.S. Department of Education policy that required the termination of millions of dollars in grants for diversity, equity, and inclusion (DEI) initiatives. U.S. District Judge Angel Kelley ruled that the directive, issued early in the administration of President Donald Trump, was "arbitrary and capricious" under the Administrative Procedure Act. The ruling favored eight states led by Democratic officials, including California, Massachusetts, and New Jersey, that challenged the agency's decision to halt the funding.
The legal dispute began in February 2025, when the Education Department announced it was canceling more than $600 million in grants. The department stated the funds were being used to train teachers and education agencies on "divisive ideologies," citing topics such as DEI, social justice activism, critical race theory, anti-racism, white privilege, and white supremacy. The funding was originally distributed through the Teacher Quality Partnership and Supporting Effective Educator Development programs. While a lower court initially ordered the grants reinstated, the U.S. Supreme Court intervened in April 2025 with a 6-3 decision that allowed the administration to proceed with the cuts while litigation continued.
Judge Kelley's ruling stated that the department failed to provide "discernible criteria" for which programs would be labeled as DEI and disfavored for funding. She noted that the department terminated grants addressing topics like "acknowledging racism" and "anti-racism," which she described as activities intended to oppose discrimination. The judge also found that the agency did not adequately consider the impact of the cancellations, writing that the directive would affect thousands of educators and those in training pipelines. Education Department press secretary Savannah Newhouse stated that taxpayer dollars should support teacher preparation and talent retention rather than "divisive ideology or racial preferences."
The ruling affects educational institutions and state agencies across the eight states involved in the lawsuit, specifically impacting those that relied on the Teacher Quality Partnership and Supporting Effective Educator Development programs. According to court records, the policy resulted in the termination of 109 grants, 40 of which were awarded to universities and institutions within the plaintiff states. The scale of the affected funding totaled more than $600 million nationwide, representing over 90% of the grants originally awarded through these specific teacher-preparation programs. For the institutions involved, this represents a loss of millions of dollars intended for teacher training and recruitment pipelines.
For individual educators and students, the policy change meant the suspension of programs and career development tracks funded by these grants. Judge Kelley noted that the termination could upend the careers of thousands of teachers and those currently in teacher-training pipelines. According to a transcript of the ruling, the department also sought to eliminate race-based recruiting strategies. The ruling establishes a legal precedent regarding how federal agencies must justify the termination of established grant programs, requiring an explanation and an assessment of the impact on recipients before funding is withdrawn.
While Judge Kelley struck down the directive, she noted that any legal efforts by the states or institutions to recover the specific funds already lost must proceed in the Court of Federal Claims, a specialized court for monetary claims against the government. The Education Department did not immediately comment on whether it would appeal the decision. The ruling effectively voids the original February 2025 directive, but the specific timeline for the potential restoration of funds or the opening of new grant applications remains dependent on further proceedings in the specialist court. As of Thursday, September 17, 2026, no specific date for these follow-up hearings has been reported.