North Carolina Attorney General Jeff Jackson has filed a lawsuit against the U.S. Department of Education, accusing the agency of unlawfully terminating nearly $50 million in federal funding designated for public schools serving low-income and rural communities across the state.

According to the North Carolina Department of Justice, the funding was already being used by school districts to support roughly 23,000 students, including children in areas heavily affected by Hurricane Helene. The money was awarded through the federal Full-Service Community Schools program, a long-standing initiative designed to support schools facing high poverty rates and related challenges.

State officials say the Department of Education informed North Carolina on December 12 that the grants would be cut off effective December 31, a move that could force schools to shut down programs and lay off staff in the middle of the academic year.

The funding was authorized by Congress under the Elementary and Secondary Education Act and reaffirmed through the Every Student Succeeds Act. In 2023, the Department of Education awarded more than $49.8 million to the North Carolina Community Schools Coalition, which includes the state’s Department of Public Instruction.

The coalition planned to use the funds over five years to support 55 schools across 18 public school districts. The programs were aimed at expanding learning opportunities, addressing adverse childhood experiences that impact student development, supporting early literacy and childhood education, and strengthening teacher retention in elementary and middle schools. Schools also relied on the grants to provide family services, mental health support, college and career exposure, and workforce training opportunities.

State officials emphasized that the program was intentionally designed to give districts flexibility to respond to local needs. That flexibility allowed rural schools to tailor services to their communities, whether by addressing food insecurity, expanding after-school programs, providing health services, or helping families remain housed during emergencies.

After Hurricane Helene, several districts used the funds to help families secure temporary housing and transportation so students could continue attending school despite widespread disruption. The Department of Education had reviewed and approved each district’s plans when the grants were awarded, and schools say they relied on that approval when hiring staff and building long-term programs.

The lawsuit argues that the federal agency has not alleged any misuse of funds or failure to meet performance requirements. Under federal law, multi-year grants can only be terminated for specific performance-based reasons, the complaint states.

Attorney General Jackson’s office contends that the Department’s actions violate the Administrative Procedure Act, federal education regulations, and the U.S. Constitution, which grants Congress — not executive agencies — authority over federal spending decisions.

The case seeks to block the termination of the grants and restore funding for the affected schools.