States Must Inform Districts that Secretary DeVos’ Rule Diverting Emergency Funds to Private Schools Is Illegal

In letters to State Attorneys General and Education Commissioners, Education Law Center is requesting New Jersey and New York take immediate action to comply with the recent court ruling nullifying U.S. Secretary of Education Betsy DeVos’ rule diverting federal CARES Act funding from public to private schools.

In July, Secretary DeVos and the U.S. Education Department promulgated an Interim Final Rule contradicting the plain language of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed by Congress in March. As part of the law, Congress appropriated billions of dollars in emergency aid for public schools across the country.

Instead of allocating a portion of CARES Act funding to private schools by calculating the number of low-income private school students, as required by the plain language of the CARES Act, the DeVos rule instructed districts to count all private school students. This rule, designed to advance Secretary DeVos’ political views, would have deprived public schools of hundreds of millions of dollars in urgently needed funds to address the impacts of the COVID-19 pandemic.

The DeVos rule prompted a wave of lawsuits. States and school districts sued Secretary DeVos in two cases, brought in federal court in Washington and California. Another advocacy group sued in federal court in Maryland. The courts in Washington and California issued preliminary injunctions temporarily blocking the rule.

Permanent relief came from a federal court in the District of Columbia in NAACP v. DeVos. In that case, parents, school districts and the NAACP asked that the rule be vacated nationwide. The plaintiffs were represented by the law firm, Munger, Tolles & Olson LLP, Education Law Center and the Southern Poverty Law Center, which collaborate on the Public Funds Public Schools campaign to combat the diversion of public education funds to private schools.

On September 4, Judge Dabney L. Friedrich granted the plaintiffs’ summary judgment motion and invalidated the rule nationwide. Judge Friedrich ruled that DeVos’ Rule was contrary to the “unambiguous mandate” of the CARES Act. On September 9, The U.S. Education Department posted a notice on its website that the rule is no longer in effect.

Concerned that without prompt action, desperately needed emergency relief funds would continue to be funneled to private schools – even the most elite – ELC is sounding the alarm to state officials in New York and New Jersey. ELC is urging the states to immediately notify school districts that, as a result of the court ruling, they can only allocate CARES Act funds based on the enrollment of low-income students in private schools. The states must also instruct districts to immediately stop disbursing any non-committed CARES funds under the illegal DeVos’ rule and assist districts in recovering any monies improperly diverted under the rule.

Keeping the CARES Act funds in public schools is particularly crucial given the dire financial straits of districts in both New York and New Jersey. In New York, immediately after the CARES Act was passed, Governor Andrew Cuomo cut state education aid in the exact amount that districts were slated to receive from the CARES Act. Since then, the Governor has withheld twenty percent of various expense-based state aids, such as transportation and special education. He has also threatened to withhold twenty percent of all districts’ Foundation Aid if Congress fails to provide more federal pandemic relief funds to states.

In New Jersey, where students are owed over $2 billion under the School Funding Reform Act (SFRA), Governor Phil Murphy reneged on a proposal to increase state aid in FY21 and is proposing to cut school aid to a significant number of districts, including those that do not meet the spending threshold set forth in the SFRA.

“It is imperative that New York and New Jersey quickly inform school districts that the illegal rule is no longer in effect,” said David Sciarra, ELC Executive Director. “With the prospect of significant and damaging state aid cuts, and at a time when districts face the increased costs of protecting the health of students and staff in the pandemic, it is imperative that districts retain all of the federal relief funding to which they are entitled.”

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Press Contact:

Sharon Krengel
Policy and Outreach Director
973-624-1815, x 24

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Press Contact:
Sharon Krengel
Director of Policy, Strategic Partnerships and Communications
973-624-1815, x240