Education Secretary McMahon rescinded states' extensions to spend COVID-relief education funds, cutting billions including $137M for Mississippi

On March 28, 2025, U.S. Secretary of Education Linda McMahon sent a letter to chief state school officers announcing that the Department of Education would no longer honor time extensions it had previously granted for states to draw down remaining COVID-19 pandemic relief funding, including Elementary and Secondary School Emergency Relief (ESSER) dollars. Those extensions had allowed spending to continue through March 2026. McMahon wrote that the approvals were rescinded as of that day, reasoning that the pandemic was over, and told states they would have to reapply project by project and demonstrate how each expense related to mitigating the effects of the pandemic.

The change affected billions of dollars nationwide that states and school districts had already obligated for ongoing work. Mississippi alone stood to lose about $137 million that its education department was using for literacy and math programs, student mental health services, school construction, and rural technology. Because Congress had appropriated the funds and the spending timelines had already been approved, state officials said the sudden reversal upended budgets for programs that were mid-stream.

Updates

2025-04-10 — Seventeen states and D.C. sued to reverse the rescission [5]

A coalition of seventeen states and the District of Columbia sued the Department of Education and McMahon in the U.S. District Court for the Southern District of New York, alleging the abrupt cancellation violated the Administrative Procedure Act and seeking to restore the approved spending deadlines.

2025-05-05 — Federal judge issued a preliminary injunction reversing the rescission [6]

A federal judge granted a preliminary injunction for the states that sued, blocking the rescission and reinstating their extended deadlines to spend the relief funds.

2025-06-26 — Education Department restored the pre-rescission spending process [2]

The Department of Education issued a "Dear Colleague" letter reverting the reimbursement process to how it operated before March 28, and Mississippi's roughly $137 million was unfrozen by June 30, 2025.