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THE SECRETARY OF EDUCATION
WASHINGTON, DC 20202
June 26, 2025
Dear Colleague,
On March 28, 2025, the Department of Education (the Department) issued a letter to State
Education Chiefs rescinding its prior extensions of the liquidation period for COVID-related
grants awarded under the Education Stabilization Fund (ESF) program. On April 3, the
Department followed up with an additional letter outlining the process for requesting extensions
for specific projects.
On May 6, the United States District Court for the Southern District of New York entered a
preliminary injunction in New York et al. v. Department of Education et al., 1:25-cv-02990-ER,
enjoining the Department from “enforcing or implementing as against Plaintiffs” the March 28
revocation of the extension period for 16 plaintiff states and the District of Columbia.
On May 11, the Department issued a letter notifying the plaintiffs in the New York litigation that
the Department was modifying the period to liquidate obligations under the ESF program to
terminate on May 25.
On June 3, the United States District Court for the Southern District of New York entered another
preliminary injunction in the New York litigation that enjoined the Department from “enforcing
or implementing as against Plaintiffs” the directives in the May 11 letter.
Recently, on June 20, the United States Court of Appeals for the Second Circuit denied the
Department’s motion to stay the District Court’s June 3, 2025 injunction. 1
The original intent of the policy announced on March 28 was to treat all states consistently with
regards to safeguarding and refocusing their remaining COVID-era grant funding on students.
The ongoing litigation has created basic fairness and uniformity problems—many states, such as
yours, have continued to be covered by the March 28 policy, while the plaintiffs in the New York
litigation have not been subject to that policy due to events in the litigation. 2
As such, given the uniformity and fairness problems set forth above, during the pendency of this
litigation and unless and until the Department is allowed to uniformly apply the policy described
in the March 28 letter to all states, the Department has decided to address these fairness and
uniformity problems in this interim period by returning non-plaintiff states to the liquidation
process in place prior to the issuance of the March 28 letter. Thus, as of today, all states can
1
New York et al. v. Department of Education et al., No. 25-1424 (2d Cir. 2025).
2
Considering any reliance interests in the Department’s post-March 28 policy, as required by Food & Drug Admin.
v. Wages & White Lion Invs., L.L.C., 604 U.S. ___, 145 S. Ct. 898, 917 (2025), we view them as minimal given that
the pre-March 28 process affords greater flexibility for all states to liquidate their remaining ESF COVID-era grant
funds.
submit reimbursement or route pay requests (depending on the specific state) for their ESF
programs, and they will be reviewed and evaluated consistent with that prior process. States that
have already submitted requests and receipts as part of the review and appeals process do not
need to resubmit — see our FAQ for more details.
Note that in the New York litigation, the Department opposed the entry of injunctions on the
grounds that, among other reasons, the Department is unlikely to be able to recover funds even if
the Department ultimately prevails in the litigation. To mitigate those concerns, and consistent
with the prior process, we will carefully review requests in order to ensure they continue to
adhere to governmentwide grant cost principles and that, broadly, expenditures are intended to
“prepare, prevent, and respond to coronavirus.” 3
There are some specific circumstances, including the disposition of pending prior project-
specific requests and pending administrative appeals, addressed in a new set of FAQs available
here.
Thank you for your attention to this matter, and for all you are doing to support our Nation’s
students.
Sincerely,
Linda E. McMahon
3
CARES Act, Pub. L. No. 116-136, 134 Stat. 281, 564 (Mar. 27, 2020); Consolidated Appropriations Act, 2021,
Pub. L. No. 116-260, 134 Stat. 1182, 1924 (Dec. 27, 2020); see American Rescue Plan Act of 2021, Pub. L. 117-2,
135 Stat. 4, 19, sec. 2001 (Mar. 11, 2021).