By: Tracie Carter
New Jersey will retain more than $1 billion in critical federal education funding following an agreement reached between a coalition of 19 state attorneys general and the Trump Administration, according to a statement from the New Jersey Attorney General’s Office.
Acting Attorney General Jennifer Davenport announced that the agreement resolves a lawsuit challenging the federal government’s attempt to withhold education funds based on a disputed interpretation of Title VI of the Civil Rights Act of 1964.
The settlement prevents the U.S. Department of Education from cutting off funding to New Jersey’s state and local school districts under those conditions.
The lawsuit stemmed from an April 3, 2025 directive in which the U.S. Department of Education warned states they could lose funding unless they accepted new federal requirements tied to diversity, equity, and inclusion policies.
New Jersey declined to certify compliance, arguing the guidance was vague, unlawful, and inconsistent with existing civil rights law.
Governor Mikie Sherrill praised the outcome, saying the agreement protects students and families across the state, particularly those who rely on special education services and other federally funded programs.
The funding preserved through the agreement supports students with disabilities, children from low-income families, multilingual learners, and vulnerable youth, including those in foster care or experiencing homelessness. 
Acting Education Commissioner Lily Laux said the resolution allows school districts to remain focused on providing safe, inclusive, and high-quality learning environments.
State officials said the agreement ensures New Jersey schools will continue receiving congressionally approved funding without being subjected to unlawful federal conditions.