A federal judge has cleared the way for the U.S. Department of Education to cut off two Full-Service Community Schools grants totaling $18.5 million annually across 32 Illinois schools, a ruling that leaves 230 laid-off staff without a path to reinstatement through that lawsuit and puts an end to a network of student services that included food pantries, clothing closets, enrichment clubs, and summer programs.
On June 26, 2026, U.S. District Judge Martha M. Pacold denied a motion for a preliminary injunction and partially dismissed six of eight claims brought by ACT Now Illinois, the nonprofit administering the grants, and Metropolitan Family Services. The decision allows the grant terminations to take effect as of July 1. ACT Now Illinois said it was forced to cease all Full-Service Community Schools operations, terminate staff, end contracts with partner schools and community organizations, and dismantle its statewide network, according to a press release from the Chicago Lawyers' Committee for Civil Rights, which represents the plaintiffs.
The grants had three years of funding remaining and were worth nearly $56 million combined, according to Education Week. The schools affected include Flinn Middle School and Whitehead Elementary School in Rockford, Wegner Elementary and Leman Middle School in West Chicago Elementary School District 33, and schools in East St. Louis, which had received a short reprieve earlier in 2026 when a judge ruled funding had to be restored until the end of the 2025-26 school year, the Belleville News-Democrat reported.
Grant terminations and layoffs
The U.S. Department of Education issued Notices of Non-Continuation on December 12, 2025, 19 days before the end of the budget period, stating the grants reflected the prior administration's priorities and conflicted with those of the current administration, according to the court complaint. The notices did not identify deficiencies in programmatic performance, fiscal management, or reporting. Plaintiffs submitted reconsideration requests on December 18, which were denied on December 29.
ACT Now Illinois executive director Susan Stanton said 230 school employees across Illinois had already been laid off, according to Education Week. The grants funded 48.5 full-time employees at partner schools and organizations and provided 545 hourly employment positions that would be immediately eliminated, the complaint said. ACT Now itself cut 13 core staff positions. Herrin Central Unified School District, which serves about 2,300 students, said it would lose nine staff positions funded by the rural grant, and described the hiring and re-hiring process as long and resource-intensive.
Stanton also said schools have had to lock up clothing closets and food pantries and eliminate enrichment clubs and summer experiences because of the lost funding and staff, Northern Public Radio reported.
Multiple legal challenges
The Illinois case is one of three separate court challenges covering five discontinued Community Schools grants totaling more than $85 million, Education Week reported. A second lawsuit is still ongoing before Judge Sparkle L. Sooknanan and includes plaintiffs in Kentucky, New Jersey, and New York.
The Department of Education had already committed the clawed-back Illinois grant funds to other Community Schools grant recipients whose awards remained intact. Judge Sooknanan cited that reallocation in December 2025 as a reason she could not grant a restraining order halting the cuts, according to Education Week.
Inconsistency in Idaho
The Department's handling of the cancellations has not been uniform. An Idaho nonprofit that also received a Full-Service Community Schools grant had its funding canceled and received an appeal rejection letter on December 30, 2025, only to receive a reversal the next day restoring the funds, Education Week reported. That reversal shows internal inconsistency in how the terminations were administered.
Update - September 19, 2026
On July 14, 2026, ACT Now Illinois filed a Notice of Appeal to the U.S. Court of Appeals for the Seventh Circuit, seeking reversal of Judge Pacold's denial of the preliminary injunction and dismissal of six of eight claims. The appeal argues that the Department of Education lacked authority to discontinue the grants on the basis of policy alignment and failed to follow legal requirements governing federal grant administration. ACT Now is asking the Seventh Circuit to expedite the case given the ongoing harm to students and families [8].
As the 2026-27 school year began, affected schools continued to operate without the community schools funding. WGLT reported on August 12, 2026, that Unit 5 schools in Normal, Illinois, had terminated full-time enrichment coordinator positions and drastically reduced after-school and summer programming, with local grants and donations covering only a fraction of what the federal grant had supported [9].