The funding was part of the federal Full-Service Community Schools (FSCS) program. In 2023, North Carolina was awarded more than $49.8 million to support approximately 23,000 students across 55 schools in 18 districts.
"Pulling the Rug Out"
The Department of Education notified the state on December 12 that the grants would be terminated by the end of the year. According to the lawsuit, the department gave no allegation of misuse or performance failure. Under federal law, multi-year grants like these are typically only terminated for performance-based reasons.
“Our kids deserve better,” Attorney General Jeff Jackson said. “The Department of Education approved these programs, allowed schools to build them, and now it’s trying to pull the rug out from under dozens of rural communities in the middle of the school year.”
Critical Support for Western North Carolina
The timing of the cut is particularly sensitive for Western North Carolina. Following Hurricane Helene, schools used these specific FSCS funds to provide:
Emergency Housing: Helping displaced families secure temporary shelter.
Transportation: Ensuring students remained connected to their classrooms despite infrastructure damage.
Mental Health: Addressing trauma and Adverse Childhood Experiences (ACEs) exacerbated by the disaster.
Dan Leroy, CEO of the United Way of Asheville City and Buncombe County, noted that the community school infrastructure was a "key reason" his organization could provide rapid relief. Community School Coordinators acted as "trusted hubs," organizing donations and connecting families to food, clothing, and household goods.
Impact on Students and Staff
The FSCS program is designed to address non-academic barriers to learning, such as food insecurity and poor health outcomes. If the lawsuit does not succeed, school districts face:
Mid-year Layoffs: Personnel hired specifically for these programs may lose their jobs immediately.
Program Closures: After-school initiatives, literacy programs, and college/career tours will be shuttered.
Loss of Local Control: The program’s flexibility allowed rural districts to decide whether funds were best spent on mental health services or nutrition.
Legal Arguments
The lawsuit alleges that the Department of Education's actions violate:
The Administrative Procedure Act: For failing to provide adequate notice or a valid reason for the cut.
The U.S. Constitution: Specifically the "Power of the Purse," as Congress—not executive agencies—has the authority to direct federal spending.
State leaders emphasize that schools relied on the federal government’s word to build these programs. “Our students shouldn’t be treated like that,” Jackson added, “and we’re going to court to protect them.”