By David Nash, Esq., Director of Legal Education and National Outreach
It all feels like a blur. Seemingly each day since January 20th there are new Executive Orders, “Dear Colleague” Letters, press statements or social media posts that seem to declare that major aspects of federal law impacting public schools have now changed, and suggesting that school districts must adjust on the fly or risk the loss of federal funding. Whether it is eliminating all DEI policies, denying the existence of transgender and nonbinary students and staff, or schools being expected to cooperate with immigration enforcement efforts, public schools are being warned that failure to comply could risk the loss of hundreds of millions of dollars in federal aid.
In this article, we will seek to provide clarity on the current status of state and federal education law related to protection from discrimination, highlight some of the legal challenges to recent federal actions and identify key considerations for school districts trying to make sense of it all. (Click here for a resource tracking the many pending legal actions against the Trump administration.)
Federal Funding for New Jersey
According to data from the National Center for Education Statistics, New Jersey public schools receive approximately 7.7% of their funding from federal aid, with the remainder coming largely from state aid and local property taxes. This figure is well below the national average of 13.7% of funding from federal aid. In the 2021-22 school year, this represented $3.1 billion in total aid, or approximately $2,232 per student. The amount of federal aid varies dramatically from district to district, depending on poverty levels and other factors, such as urban, suburban and rural status, with the percentage of funding per district ranging from less than 1% to more than 36%.
Federal funding is driven largely by specific need-based formulas, although funding is also provided through various competitive grant programs. Of course, while federal funding generally represents a small percentage of overall school funding for most school districts, the potential for loss of any school funding raises significant concerns for school districts.
Limits on Authority to Withhold Federal Aid
Article IX of the Constitution vests in Congress the authority to authorize spending, providing in part that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” Article II, Section 3 charges the President with the responsibility to spend funds authorized by Congress as part of ensuring that the laws are “faithfully executed.” The issue of whether or not the President has authority to withhold federal aid is not new, and was squarely addressed by the U.S. Supreme in 1975 and again in 1996. In 1973, disputes arose between Congress and then President Nixon when Nixon refused to spend funds appropriated by Congress on numerous programs. In response, Congress passed the Congressional Budget and Impoundment Control Act of 1974 (ICA).
The Act requires the president to report to Congress when he impounds funds as a deferment (or a temporary delay) or a rescission (a permanent cancellation) of spending. Under the ICA, spending deferrals must not extend beyond the current fiscal year, and Congress can override deferrals using an expedited process. For rescissions, the president must propose such actions to Congress for approval, and he can delay spending-related to rescissions for 45 days. Unless Congress approves the rescission request, the funds must be released for spending.
The Supreme Court considered the impoundment question in Train v. City of New York (1975) after the ICA was passed. The city sued after it did not receive funds allocated to it under the Federal Water Pollution Control Act Amendments. The Court held that under the Act the President did not have the authority to withhold funding that was appropriated by Congress. The Court noted that the President had not followed the prescribed process under the ICA to either delay or rescind funding.
There was a brief period of time in the 1990s when Congress provided the President with a line item veto under the Line Item Veto Act of 1996. The act amended the ICA “to authorize the President to cancel in whole any dollar amount of discretionary budget authority, any item of new direct spending, or any limited tax benefit signed into law.” However, that law was held to be unconstitutional in 1997 in the case of Clinton v. City of New York. In that case, the Supreme Court struck down the line-item veto in a 6-3 decision. President Clinton had cancelled sections of the Balanced Budget Act of 1997 and the Taxpayer Relief Act of 1997. Writing for the majority, Justice John Paul Stevens said under the Constitution’s Presentment Clause in Article I, Section 7, the president must approve or reject a bill as presented to him by Congress.
Civics 101: Executive Orders and Agency Guidance v. Statutes v. Constitutional Provisions
Under Article II of the Constitution, Presidents are charged with ensuring that the laws enacted by Congress and signed by the President are faithfully executed. In fulfilling this function, there is often a need for federal agencies to enact regulations to provide greater specificity or to use the discretion provided by Congress in implementing new laws. The regulatory process includes publication of proposed rules, public comment, agency review and response, and ultimately adoption.
In addition to this rulemaking process, Presidents may also issue Executive Orders from time to time to signal areas of focus or priority, or to exercise discretion granted to the President by Congress. However, such Executive Orders must be consistent with existing federal statutes and cannot run afoul of the U.S. Constitution, either by contradicting the specific wording of the Constitution or by ignoring binding legal precedent from the U.S. Supreme Court and federal district courts. For example, most legal scholars agree that the recent Executive Order seeking to end birthright citizenship runs afoul of the plain language of the Fourteenth Amendment, and has been halted due to a preliminary injunction that was allowed to stand by the Ninth Circuit Court of Appeals. (See Court ruling here.)The Trump Administration is seeking to have that decision overturned by the U.S. Supreme Court and that case is currently pending appeal.
An example of a federal statute that constrains Executive Orders would be the provision in the Every Student Succeeds Act that prohibits the federal government from seeking to dictate State standards or local decisions related to curriculum. Section 8526A of ESSA states:
“No officer or employee of the Federal Government shall, through grants, contracts, or other cooperative agreements, mandate, direct, or control a State, local educational agency, or school’s specific instructional content, academic standards and assessments, curricula, or program of instruction developed and implemented to meet the requirements of this Act.”
Numerous other federal law provisions place similar constraints on federal authority to dictate curriculum decisions. (See article on federal statutory constraints on efforts to dictate K-12 curriculum.)
Courts Force Pause on Many of the New Administration’s Executive Orders
Since being sworn in on January 20th, President Trump has issued numerous Executive Orders, coupled with a memo from the Office of Management and Budget, seeking to impose sweeping federal funding freezes. Since then, the OMB memo has been rescinded and a number of federal courts have issued preliminary injunctions preventing the planned funding freezes from going into effect. Litigation is ongoing, including efforts to ensure that the Administration honors the recent court orders and releases funds that had been frozen.
Not surprisingly, in light of the clear statutory language in the Impoundment Control Act and the Supreme Court precedent cited above, federal courts have begun to act quickly to ensure that limits on federal authority to freeze funding are not being violated, including a preliminary injunction just issued on February 21, 2025 halting implementation of an Executive Order seeking to end support for DEI. (See NPR article)
In light of the extremely fluid nature of the numerous lawsuits and court orders in these matters, readers are urged to consult with your school district’s legal counsel to understand the current legal status of any such orders.
The Status of Title IX
On January 9, 2025, a federal district court ruled that the Title IX regulations implemented by the Biden Administration in 2024 were invalid, in the case of State of Tennessee v, Miguel Cardona. In light of that decision, the Trump Administration issued a Dear Colleague Letter on January 31 and updated on February 4, announcing that the 2024 regulations were no longer in effect and directing school districts to comply with the prior 2020 regulations. While potential legal challenges may arise to the reinstatement of the prior regulations, school districts should follow those regulations at this time. It is important to note, however, that nothing in the 2020 regulations suggests that individual school districts or entire states risk losing federal funding if they follow policies that honor what students are telling them about gender identity in terms of use of names, pronouns, honoring requests for confidentiality and access to restrooms. To that point, the new Administration’s recent Executive Orders declaring that there are only 2 genders, and threatening to withhold federal funding for any school district engaged in “gender ideology” appear to lack any regulatory or statutory authority.
Ongoing Duty to Implement New Jersey Anti-Discrimination and Related Laws
While federal courts continue to grapple with the onslaught of litigation wrought by the new Administration’s various Executive Orders and other initiatives, school leaders should be cognizant of their ongoing legal obligations to implement New Jersey-specific anti-discrimination laws and related requirements. Listed below are some examples of requirements that remain in effect:
- The New Jersey Law Against Discrimination’s protections against discrimination based on protected classes, including but not limited to disability, gender, gender identity, sexual orientation, race, religion, ethnicity and national origin (e.g. NJLAD specifically requires that persons have access to places of public accommodation, such as restrooms and locker rooms in a manner that aligns with their gender identity);
- A prohibition on school district policies that seek to mandate the sharing of student information regarding gender identity with a parent or guardian regardless of the student’s wishes regarding such notice (based on preliminary injunctions requested by the New Jersey Attorney General and granted, which prohibit the implementation of such policies);
- The requirement to address issues related to diversity, equity and inclusion in the curriculum, K-12, under P.L. 2021, c. 32 and many other statutory requirements, as well as the New Jersey Student Learning Standards;
- New Jersey’s Anti-Bullying Bill of Rights, which prohibits harassment, intimidation or bullying of students based on any actual or perceived characteristics; and
- The requirement to educate all students, regardless of citizenship status (which also continues to be protected under federal law as well, in light of the U.S. Supreme Court decision in Plyler v. Doe). See NJDOE Guidance on Protecting the Rights of Undocumented Students.
Readers should also be mindful that the Freedom to Read Act, which prohibits censorship of school district library materials, has also been signed into law and goes into effect for all New Jersey public schools as of December 9, 2025. See Freedom to Read Act Becomes Law – NJPSA and FEA. The law requires school districts to make diverse and inclusive materials available to students and prohibits school districts from banning access to library materials simply because they contain reference to specific topics, such as gender identity, sexual orientation, or race.
Where school districts fail to implement the provisions of NJLAD they face the potential for fines, and compensatory and punitive damages, as well as the granting of attorney’s fees. Where individual staff members act in a discriminatory manner that violates NJLAD they face the potential for disciplinary action, including in extreme cases tenure charges and termination, as well as the potential suspension or revocation of certificates, and the potential impact for the employee’s pension to be reduced.
Moving Forward
School districts should work closely with their board attorney to carefully consider existing state and federal constitutional, statutory and regulatory requirements before making any efforts to change existing policies and practices in areas such as curriculum, anti-discrimination policies, and human resources. Rash decisions to align district policies and protocols to the latest Executive Order, Dear Colleague letter, social media post or media report could inadvertently place a school district in a compromised legal position, and in some cases could undermine health and safety of students or staff and result in irreparable harm.
It is also more important than ever to provide clear guidance and professional learning opportunities for all levels of school staff to ensure that employees do not misunderstand their current legal obligations. For example, some school staff may think that legal requirements have changed where they have not in areas such as:
- Addressing issues of diversity, equity and inclusion in the curriculum;
- Providing a safe and affirming environment for students and staff in the LGBTQIA+ community (See NJDCR Statement on rights of LGBTQIA+ school staff and students);
- Ensuring that school districts are not engaged in any efforts to collect data or bar student access due to citizenship status; and
- Continuing to implement critical initiatives that may be funded in whole or part through federal funding sources.
Now more than ever, school leaders need to send a clear message to all stakeholders that New Jersey’s public schools remain committed to ensuring a safe, affirming environment that is conducive to learning for all students, and that our commitment to protect all stakeholders from discrimination remains as strong as ever.