School Mental Health Grants Get Three-Month Lifeline After Court Rejects Trump Appeal

One hundred and twenty school mental health projects across the country will continue operating for at least three more months—and potentially through the end of 2026—after the Trump administration lost an appeal seeking to keep the grants frozen, the U.S. Department of Education announced last week.

The extension brings temporary relief to programs that have operated in legal limbo since late April 2025, when the Education Department abruptly told 223 grant recipients their funding would end December 31, years ahead of schedule. The grants, awarded under two programs created during Trump's first term, support hiring school counselors, psychologists, social workers, and clinicians in districts nationwide.

But the reprieve comes with conditions that underscore the precarious position these programs remain in. The department's March 6 notice told grantees the extended funding—available through June 1 with potential continuation through December 2026—was issued "under protest" as it appeals a federal court decision that found the original cancellations illegal.

Nearly a Year in Limbo

The saga began when Congress allocated $1 billion for school mental health services in 2022 following the Uvalde, Texas school shooting. The Biden administration awarded 339 five-year grants through two programs: the School-Based Mental Health Services grant and the Mental Health Service Professional Demonstration grant.

Then, without warning, 223 of those recipients received termination notices in April 2025. The Education Department justified the sudden cutoff by stating the projects reflected Biden administration priorities and were "inconsistent" with "the best interest of the federal government."

Natalie Gustafson, director of behavioral-health and prevention services for Northwest Educational Service District 189 in Washington state, described the uncertainty in stark terms. Her organization had hired 20 licensed behavioral-health providers by the end of 2025—the third year of a five-year, $11.9 million grant—but didn't know if funding would continue.

"The programs have been operating under complete uncertainty of how or if they could continue," Gustafson said.

Legal Challenge Forces Reversal

Sixteen states with Democratic attorneys general sued in June 2025 to restore the canceled grants. Last October, federal Judge Kymberly Evanson in Seattle ruled the Education Department acted illegally by canceling projects without providing individualized reasoning for each termination, violating requirements under the Administrative Procedure Act.

Evanson's ruling applied to 138 grants in the states that filed suit. The Trump administration appealed in January 2026 and asked the U.S. Circuit Court of Appeals for the 9th Circuit to pause the lower court's decision while it considered the appeal.

The appeals court denied that request on February 26, forcing the department to resume funding. Of the 138 affected grants, 120 will continue with extended awards; twelve will end either because recipients failed to submit required updates or due to "performance, fiscal, and administrative concerns."

The department set aside money to fund projects through December 2026, according to a court filing, though grantees must first submit midyear performance and budget reports due June 1 to potentially access additional funding beyond the initial three-month extension.

New Restrictions Create Operational Challenges

The funding extension introduces complications absent from the original grant structure. Previously, organizations received full-year allocations and could draw down federal money as expenses occurred. Under the new arrangement, grantees can only access funds on a reimbursement basis—requiring them to use other funding sources first, then seek federal reimbursement.

"The partial-year funding with a report due midyear is a departure from how the grant funding previously worked," Gustafson noted.

The operational uncertainty has already taken a toll. Six grant recipients voluntarily terminated their awards before receiving funding extensions, according to the administration's court filing.

Meanwhile, the Trump administration in December awarded 65 new school mental health grants worth $208 million using money from the awards it expected to cancel. Congress set aside at least $164 million for the two school mental health programs in its February 2026 budget, though the Education Department hasn't clarified whether this appropriation will fund the extended grants.

Broader Pattern of Grant Disruptions

The school mental health grants represent one piece of a far larger pattern. The Education Department disrupted more than 760 in-progress grants across more than 30 programs in 2025, totaling over $2 billion—one of the agency's largest-ever mass cancellations.

The canceled mental health projects alone affected school districts, multidistrict partnerships, state education departments, and universities in all 50 states. Some had just launched their work; others were entering their third year when they received termination notices.

For Northwest Educational Service District 189, which serves school districts across northwest Washington, the legal victory offers cautious optimism after months of contingency planning. The organization had explored multiple strategies to continue services if federal funding stopped entirely.

"We are beginning to have some hope that we can continue with the rest of this school and potentially calendar year," Gustafson said.

The Trump administration's broader appeal of Judge Evanson's ruling remains pending, meaning the fundamental legal question—whether the department can cancel multi-year grants mid-stream without individualized justification—still lacks final resolution.

For now, 120 school mental health programs have breathing room to continue their work. Whether that support extends beyond June, or survives the ongoing appeal, depends on decisions still to come from federal judges and education officials whose positions on the grants remain fundamentally opposed.