The U.S. Department of Education announced an early liquidation of COVID-19 relief funds. Now, the Mississippi Department of Education and the state’s school districts are at risk of losing a collective $137 million.
On March 28, U.S. Secretary of Education Linda McMahon sent out a letter informing state education departments that COVID-19 relief funds, initially approved for a March 31, 2026, liquidation deadline, will end liquidation effective immediately.
For Mississippi, the new deadline would cause detrimental effects to the state’s students and educators, according to the Mississippi Department of Education, which is now asking the U.S. Department of Education to keep the original deadline.
Plans were already underway to use the funds to bridge COVID-19-related learning gaps. The funds were also meant to support school nurses, mental health, students experiencing homelessness and facility repairs and improvements, all of which were significantly impacted by the COVID-19 pandemic.
The letter
Just over one page long, McMahon’s letter addressed to “State Chiefs of Education,” says after careful review, the U.S. Department of Education has decided to “modify” the liquidation time period under the Education Stabilization Fund.
The department will consider extensions on an individual project basis. Otherwise, the liquidation takes effect immediately.
The Education Stabilization Fund was implemented in March 2020 and has awarded more than $276 billion to states, according to the U.S. Department of Education.
In the past five years, Mississippi has used the Education Stabilization Fund to cover the American Rescue Plan Elementary and Secondary School Emergency Relief funds, American Rescue Plan Homeless funds and American Rescue Plan Emergency Assistance to Non-Public Schools funds.
U.S. Secretary of Education Linda McMahon smiles during the signing event for an executive order to shut down the Department of Education next to U.S. President Donald Trump, in the East Room at the White House in Washington, D.C., U.S., on Thursday, March 20, 2025.
According to the letter, the initial COVID-19 relief funds came with stipulation that all “financial obligations incurred” must be liquidated within 120 days after the conclusion of the performance period.
Since its inception in 2020, the U.S. Department of Education has approved several extensions to this 120 day deadline.
According to McMahon’s letter, the U.S. Department of Education feels COVID-19 relief grants have already been extended too far. The previously approved March 2026 deadline was set toward the end of the Biden administration, a decision the U.S. Department of Education is now calling unjustified.
“The Department has concluded that the further extension of the liquidation period for the aforementioned grants, already well past the period of performance, was not justified,” the letter reads. “You and your subrecipients have had ample time to liquidate obligations … Extending deadlines for COVID-related grants, which are in fact taxpayer funds, years after the COVID pandemic ended is not consistent with the Department’s priorities and this not a worthwhile exercise of its discretion.”
The letter states the U.S. Department of Education has inherent power to rescind prior decisions, and since the 2026 extension date was set recently, “any reliance interests developed are minimal.”
In other words, states have no reason to have relied on the extra year’s worth of funding, which the letter calls “administrative grace.”
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The letter ends with instructions on applying for an individual project extension. States must submit an email listing, “(1) how a particular project’s extension is necessary to mitigate the effects of COVID on American students’ education, and (2) why the Department should exercise its discretion to grant your request.”
The response
Many state education departments, including the Mississippi Department of Education, are now calling for the U.S. Department of Education to reinstate the March 2026 deadline.
On April 2, Mississippi State Superintendent of Education Lance Evans sent McMahon a response letter. In four pages, Evans outlines the detrimental effects the year’s loss of funding would cause, especially since the decision was announced without prior notice.
Dr. Lance Evans, Mississippi’s state superintendent of education, laughs while posing for a photo at the Mississippi Department of Education in Jackson on Tuesday, July 30, 2024.
“This unexpected change creates a severe hardship for Mississippi’s students, educators, and school communities,” Evans’ letter reads. “The Mississippi Department of Education (MDE) received approval for our liquidation extension request based on demonstrated need and thorough documentation. Mississippi has been operating in good faith under the assurance that we could access these resources through March 31, 2026 for projects already obligated by the September 30, 2024, deadline.”
The letter states the Mississippi Department of Education has prior written authorization of $137,221,346 in funding, and the department is already deep into planning.
Millions of dollars have already been expensed in 66 school districts. If the new liquidation deadline holds, the U.S. Department of Education has not guaranteed to reimburse any previously approved expenses.
“The impact of this sudden reversal is detrimental to Mississippi students … These are not merely numbers on a spreadsheet; they represent critical services and supports that directly benefit our most vulnerable students,” the letter says.
Terminating the Education Stabilization Fund would effectively shut down “evidence-based learning recovery programs,” “critical infrastructure improvements,” “technology access and digital learning” and “mental health and student support services.”
The Mississippi Department of Education, according to an April 3 press release, is already working to guide districts in case the funds are not recovered. Several services and local construction projects are on pause.
“If funding is not restored, Mississippi school districts will be forced to default on payments to contractors and vendors that are currently under contract, which will result in litigation that will put additional burdens on school districts,” the letter says.
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In the press release, Evans said he and his team believe the U.S. Department of Education has a legal obligation to keep the March 2026 deadline.
“Districts have contractual obligations that cannot simply be terminated without significant financial, educational, and legal consequences,” the press release states.
Funding loss
The liquidation of the Education Stabilization Fund is just the latest in a national trend of education federal funding cuts.
Scaling back the U.S. Department of Education — if not deleting it altogether — was one of President Donald J. Trump’s chief pledges on the 2024 campaign trail.
Since Trump announced McMahon’s nomination in November 2024, the former Connecticut Senate candidate and World Wrestling Entertainment Co-Founder has made it clear that she fully supports the president’s plan.
Mississippi public education has historically relied heavily on federal funding and programming. In the three months since Trump’s inauguration, public education, both K-12 and higher education, has felt a domino effect of federal funding cuts.
On Feb. 14, the U.S. Department of Education Office for Civil Rights sent a letter to public colleges and universities to dismantle Diversity, Equity and Inclusion practices or face federal funding cuts.
On March 14, public libraries lost federal funding after Trump signed an executive order called “Continuing the Reduction of the Federal Bureaucracy.” About 70 workers in the Institute of Museum and Library Services were suspended and grants were left unprocessed.
Federal funding cuts within education match patterns in other state offices. Earlier this week, the Mississippi Humanities Council received notice from the Department of Governmental Efficiency, headed by Elon Musk, that $1.5 million from the National Endowment for the Humanities was terminated.
The Mississippi Department of Education’s response reflects the disquiet many state offices are sensing throughout the nation, a feeling, Evans acknowledged, that trickles down to the local level.
“The MDE shares the same level of anxiety that districts are experiencing as a result of the ED’s decision,” Evans said.
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This article originally appeared on Mississippi Clarion Ledger: Mississippi Department of Education fights $137M federal funds cut
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