Michigan To Sue Betsy DeVos Over CARES Act Funding

MICHIGAN — The state of Michigan is suing U.S. Education Secretary Betsy DeVos over a rule allowing federal CARES Act funding the state said is meant for public schools to also be allocated to private schools.

The lawsuit was announced Tuesday in a news conference featuring Michigan Gov. Gretchen Whitmer, Attorney General Dana Nessel and state superintendent Michael Rice. Michigan is joined by California and three other states in the lawsuit.

"Any siphoning off of public school funds to non-public schools is unacceptable and it's particularly unacceptable in the midst of a pandemic," Rice said in the news conference.

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The claims of the lawsuit, described during the news conference by Nessel, are that DeVos misinterpreted language in the federal CARES Act and disregarded the clear intentions of Congress with her new rule allowing for private schools to also receive CARES Act funding.

Nessel said allocating funds to private schools "deprives public schools across our state of critical resources." Under the rule, private schools could receive services meant for disadvantaged public districts, she said.

The issue turns on how much federal CARES Act money public school districts must share with surrounding private schools, and how public and private schools can use those funds, Nessel said.

The CARES Act was adopted by Congress and signed into law in late March. Among many other things, it allocates $30.75 billion for K-12 schools and higher education in response to the coronavirus pandemic. About $13.2 billion of those funds is distributed to State Education Agencies, such as the Michigan Department of Education, which gets nearly $390 million, according to a news release. SEAs then allocate that money to LEAs, which subsequently distribute money to individual schools.

CARES Act money is designed to provide support to schools with low-income students, as it is to be allocated based on the amount of Title I funding each state and school district received in the most recent fiscal year, Nessel said.

The CARES Act money distributed to LEAs is designated for 12 allowable purposes under the statute, most of them related to the coronavirus, like personal protective equipment and technology for remote learning, Nessel said. A portion of the funds must be allocated to private school students in the same manner as funds are apportioned to private school students under Title I. LEAs calculate Title I distributions to private school students based on the number of low-income children attending those schools in each district.

The U.S. Department of Education published an interim final rule on July 1 to “clarify” requirements for allocating CARES Act money to nonpublic schools. Rather than allowing LEAs to follow the CARES Act’s requirements, the Department required LEAs to choose from two options — neither of which is specified in the CARES Act: distribute funds only to Title I-participating public schools and calculate a share for equitable services based on low-income enrollment but be subject to additional funding limitations, or distribute funds based on total student enrollment in public and private schools, regardless of student need.

Joining Nessel are the attorneys general of the District of Columbia, Maine, New Mexico, California and Wisconsin.