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Chicago will lose millions in federal funding for magnet schools this year due to a dispute with the U.S. Department of Education over how the district serves Black and transgender students.
Trump administration officials said $5.8 million will not be awarded to Chicago in the coming year under the Magnet Schools Assistance Program and $17.5 million would not be awarded for the remaining years of the district’s grants.
As a result, Chicago Public Schools now faces a $8 million hole in its current $10.2 billion budget, district officials said Wednesday. Some of that total is carryover funds from last year.
The federal government and CPS operate on different fiscal calendars, with Chicago’s starting July 1 and the federal government starting Oct. 1.
The new multimillion dollar budget hole comes as Chicago continues to be a target of the Trump administration on various policy issues, including diversity, equity, and inclusion efforts in public schools.
Despite the funding fight, CPS is continuing to forge ahead with a Black Student Success Plan it rolled out in February and a Black Student Achievement Committee mandated by Illinois law. The district is also maintaining compliance with the Illinois Human Rights Act requirements to allow transgender students access to bathrooms and locker rooms that correspond with their gender identity. Both are subject to ongoing investigations by the Trump administration.
Craig Trainor, the acting assistant secretary of civil rights in the U.S. Department of Education, sent a letter last Tuesday to CPS demanding the district abolish its Black Student Success Plan and change its policies on transgender students by last Friday in order to maintain eligibility for the Magnet Schools Assistance Program. Chicago was awarded a $15 million grant under the program in 2024 and $14.3 million in 2022.
These grants support personalized learning and science, technology, and arts programming at six elementary schools, according to grant applications from 2022 and 2024.
CPS responded to the Education Department on Friday requesting more information and an additional 30 days.
Trainor said the district’s arguments were “unpersuasive” in an email late Saturday and gave CPS until Tuesday to comply.
A letter sent by CPS’ Acting General Counsel Elizabeth K. Barton, ahead of Trainor’s new Tuesday deadline, said the department “failed to cite any violation of law or provide any evidence of harm done to our students.” She also noted the two ongoing investigations and called the exchange a “one-sided process” that “overly disregards” the federal department’s formal process and procedures.
“Without due process or an opportunity to engage in meaningful remediation, CPS cannot implement the proposed remedial actions at this time,” Barton wrote.
On Wednesday morning, Department of Education spokesperson Julie Hartman said Trainor would cut off the magnet school grant for Chicago, New York City, and Fairfax, Virginia. The latter two have maintained policies allowing transgender students the right to use facilities that correspond with their gender identity.
“The Department will not rubber-stamp civil rights compliance for New York, Chicago, and Fairfax while they blatantly discriminate against students based on race and sex,” Hartman said. “If these entities are willing to risk federal funding to continue their illegal activity, that decision falls squarely on them.”
CPS did not comment on the department’s decision.
Although the cancellation of this federal grant is small compared to the overall $10.2 billion CPS budget, it comes at a precarious time for the district. Late last week, the bond rating agency Fitch revised the district’s outlook to negative, which can affect the school system’s ability to borrow money at reasonable interest rates. And this week, officials said they’re considering a restructure of middle management in order to save money.
Joe Ferguson, president of the nonpartisan budget watchdog Civic Federation, said the amount is small enough that CPS should be able to find a way to make up for the loss of federal grant money and CPS should be applauded for “remaining true to its principles and remaining true to the legal obligations they have under state law.”
But, he said Chicago should have a contingency plan in case more federal money gets withheld.
“This sharpens the notion that the specter is real,” he said.
“I don’t think people understand what it would mean in the worst case scenario if a substantial portion of the remaining federal money was pulled away,” Ferguson said. “It would be useful for CPS to simply do kind of the austerity doomsday exercise of what they would have to undertake, and what that would look like, and how that would impact schools and families and children.”
Becky Vevea is the bureau chief for Chalkbeat Chicago. Contact Becky at bvevea@chalkbeat.org.
