CPS wins back millions in federal funding after Trump administration settles lawsuit
Chicago Public Schools has won back millions of dollars in federal grants that top education officials took away after concluding that the school district had violated students’ civil rights by having a Black Student Success Plan and policies that support transgender students.
CPS sued the federal government in March alleging that the grants were taken away without following the process required by law. That case was settled on Thursday after the U.S. Department of Education agreed to return the funds by Friday, according to a court document dismissing the case.
CPS officials did not say how much money they expected to be released as part of the settlement. But when the Education Department announced last year that it was stripping the grant, it said it would withhold about $6 million, as well as funding for future years.
“The District looks forward to working with the U.S. Department of Education to ensure these resources reach schools and students as quickly as possible,” a CPS spokesperson wrote in an email Friday.
Though it’s a relatively small amount compared to CPS’ $10 billion budget, the settlement reverses the most tangible action taken by the Trump administration against CPS. It is one of several efforts by the Trump administration to force school districts to roll back civil rights and Title IX protections against sex-based discrimination, especially as they pertain to transgender students.
The Education Department did not respond to questions about why it settled the case.
CPS officials and board members have refused to back down from their policies, though they have tried not to pick a public fight over them. CPS did not publicly announce that it was suing the federal government or that the case was settled, a fact that was first reported by Bloomberg Law.
Since Trump returned to office in 2025, the Education Department and Congress have launched multiple investigations and reviews of CPS policies and spending. As recently as this week, the Republican-led U.S. House Committee on Education and the Workforce demanded that CPS send policies and complaints as the committee continues to review whether CPS’ protections for transgender students should prompt changes to federal law.
Education Department officials contend that having a plan that endeavors to improve academic outcomes for Black students harms white and Asian students and educators.
In a 2025 letter to CPS, Craig Trainor, the acting assistant secretary for civil rights at the time, called the plan “textbook racial discrimination.” He went on to say “no justification proffered by CPS can overcome the patent illegality of its racially exclusionary plan.”
In that letter, he demanded that CPS abolish the plan.
He also attacked CPS policies that allow transgender students to play sports and use locker rooms and restrooms that correspond with their gender identity. Trainor wrote in the 2025 letter that those policies are “facially discriminatory on the basis of sex.”
In CPS’ lawsuit over the loss of the grant, the district contends that it has fully cooperated with the Office for Civil Rights’ investigation into these policies. Yet despite its compliance and the fact that reviews of these policies went away, the Education Department took away the grant.
The grants are to support some of CPS’ specialized magnet programs. In the lawsuit, CPS points out that the grant specifically went to personalized learning programs and science, engineering and technology classes in high-need schools.
Without the federal money, CPS had to find other money to cover staff salaries and use contingency funding to continue after-school programs. The “abrupt discontinuation” of the grants “without notice, hearing opportunity or any semblance of due process, significantly undermines the work that CPS engaged in for over 10 years in developing high quality programs,” the lawsuit states.
CPS officials said they planned to use the returned grant funding “to support continued, high-quality magnet school programming,” though the amount that will be available for this school year is still being determined.