Federal Judge Voids Education Department Directive Behind About $600 Million in Teacher-Training Grant Cuts

A Judge Voided the Cut. The Money Isn't Moving Yet.

On September 17, 2026, a federal judge in Boston threw out the rule the Trump administration used to cancel about $600 million in teacher-training grants^[1][4]. U.S. District Judge Angel Kelley ruled that the Education Department's February 2025 directive was "arbitrary and capricious," a legal standard under the Administrative Procedure Act^[1][3]. That sounds like the states won everything. They didn't.

Kelley also ruled that any effort to actually recover the $600 million has to go to a different court entirely, the U.S. Court of Federal Claims^[2][4]. So the policy that killed the grants is now void. The cash it killed is still gone. Both of those things are true at once, and untangling why takes the rest of this story.

What the Directive Actually Did

Starting February 7, 2025, the Education Department sent termination letters to 104 grant recipients^[2]. By the time it was done, 109 grants were canceled, more than 90% of everything funded under two federal programs: Teacher Quality Partnership and Supporting Effective Educator Development^[2][4]. Those programs paid for things like training teachers in a second language, preparing special-education instructors, and recruiting people into hard-to-fill jobs in rural and high-poverty schools^[4][5].

Eight Democratic-led states sued on March 6, 2025: California, Colorado, Illinois, Maryland, Massachusetts, New Jersey, New York and Wisconsin^[2][5]. Their case wasn't really about defending any specific class or curriculum. It was about whether an agency can erase hundreds of grants at once without ever writing down a clear rule for what it was cutting and why^[2][5].

That's what Kelley found missing. She wrote that the department's 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"^[1]. She also found the department never defined what counted as "DEI" in the first place, and never explained why the canceled programs were discriminatory^[3][4].

Why "Arbitrary and Capricious" Isn't a Verdict on DEI

This is the phrase doing all the work in this story, and it's easy to misread. "Arbitrary and capricious" is not a ruling that a policy is wrong, or bad, or even that DEI programs deserve funding. It's a narrower question: did the agency explain itself?

Under the APA, a court reviewing an agency decision asks whether the agency applied a real, stated standard, gave reasons, and considered the obvious costs of its choice^[1][3]. Kelley found the department failed on all three counts here. It never defined "DEI." It never explained which programs crossed a line, or why. And it never weighed what would happen to teachers already partway through a training pipeline^[1][3].

That matters because this kind of loss usually delays a policy rather than killing it. The department can, in theory, go back and reissue the same cuts, as long as it writes down a real rule and accounts for the fallout this time^[1][3]. So the ruling is less "these programs must be funded" and more "you can't do this by memo."

The Split That's Easy to Miss: Two Courts, Two Jobs

Here's the part that most coverage buried. American law splits these disputes across two separate courts, and each one can only give you one kind of remedy.

A district court, like Kelley's, can review whether a federal agency acted reasonably under the APA. It can void a bad policy. What it generally cannot do is order the government to pay out money it owes under a grant or contract worth more than $10,000. That job belongs to the U.S. Court of Federal Claims, under a law called the Tucker Act^[6][9].

That's why the states can win the legal argument and still not see a check. Kelley voided the directive. Only the Claims Court can order the money paid^[2][4]. This split isn't new to this case, either: the Supreme Court already leaned on it once. On April 4, 2025, the justices voted 5-4 to pause an earlier order that had restored the grants, on the theory that a district court likely lacked the power to order the money paid in the first place^[6][9].

California's attorney general, Rob Bonta, announced on September 18, 2026 that the court had granted the states' motion for summary judgment and entered a final order^[5]. His office says California's own institutions had at least $148 million in grants covered by the termination letters^[5]. Notice the word his release uses: "unlawful." Not "restored"^[5].

Two Readings of the Same Order

For the eight states, this is a case about who controls federal spending once Congress has funded it. They argue that if "DEI" can mean whatever the department says it means on a given day, no grant recipient can ever know what's actually prohibited, and that vagueness is exactly what the APA is built to catch^[2][5]. They point to what the money actually did on the ground: training bilingual teachers, meeting special-education requirements, staffing schools that already struggle to hire^[4][5]. Winning this case, for them, is less about any single grant and more about setting a limit on future mass cancellations done by memo.

The Education Department sees it differently. Its position is that Congress authorized these programs but didn't require the agency to keep funding any particular recipient forever, and that choosing where the money goes is an ordinary executive judgment^[3]. Press secretary Savannah Newhouse said taxpayer money should go toward "preparing teachers for meaningful student learning," not "divisive ideology or racial preferences"^[3]. And on the narrow legal question of which court can order money paid, the department has already won once, at the Supreme Court^[6][9].

Conservative critics of the ruling raise a separate point: a judge finding the paperwork thin isn't the same as a judge finding the programs worth funding^[7]. Their broader argument is about who gets to set education policy after an election. Voters chose an administration that ran on cutting race-conscious programming, they say, and a single district judge unwinding that choice, even on narrow procedural grounds, reads to them as the courts stepping into a fight that belongs to elected officials^[7].

For the schools and training programs caught in between, the ruling arrives too late to undo much. The National Center for Teacher Residencies, in a related case over the same cuts, said the terminations cost it nearly $1.2 million and affected 128 residents already enrolled, while blocking another 190 from enrolling at all^[3]. A win in September 2026 doesn't reopen a program that shut its doors in 2025.

How the Coverage Split Along the Way

The gap between "the policy is void" and "the money is back" is exactly where a lot of outlets stumbled. WorldNetDaily's headline read "Judge orders funding for DEI teacher training to continue after Trump nixes it" — a claim the ruling doesn't actually make, since no funding was ordered restored^[7]. NBC News led with the $600 million figure in its own headline, which risks the same impression, with the Court of Federal Claims limit appearing well below the fold^[4]. The New Republic put "arbitrary" in scare quotes and emphasized that the department couldn't even define its own policy, giving less space to the government's jurisdictional win at the Supreme Court^[3]. Courthouse News and Reuters stuck closer to the narrow, procedural reality, though even Reuters' "strikes down" implies more than a directive being vacated^[1][2].

Nineteen months after the first termination letters went out, the money still hasn't moved, and this ruling doesn't move it^[2][4]. What changed on September 17 and 18 is the directive's legal standing, not anyone's bank balance. The Education Department can now appeal Kelley's ruling or try rewriting the policy with the explanation she said was missing. Either way, the states' next fight, over whether the $600 million itself ever comes back, hasn't started yet.