Chicago Public Schools will receive millions of dollars in federal funding that the Trump administration rescinded last year after accusing the district of violating civil rights law through policies supporting Black and transgender students.
The settlement comes nearly six months after CPS sued the federal government in March, alleging that the grants were terminated without providing the notice and opportunity for a hearing required by law.
The district also argued that the U.S. Department of Education failed to follow its own procedures for discontinuing federal grants, according to court documents.
The funding fight began in April 2025 after the Education Department opened a civil rights investigation into CPS’ Black Student Success Plan, which was created to improve academic outcomes for Black students.
In September 2025, Chalkbeat reported that federal officials argued the plan amounted to racial discrimination because it directed resources toward Black students.
The Education Department also challenged CPS policies involving transgender students, including allowing them to use bathrooms and locker rooms corresponding with their gender identity. Chalkbeat reported that federal officials said those policies violated Title IX, which prohibits sex-based discrimination in federally funded education programs.
The Education Department subsequently moved to rescind millions of dollars in grants from CPS. The department said it would withhold about $6 million, along with funding for future years, according to WBEZ Chicago.
The grants at the center of the dispute were not specifically for the Black Student Success Plan or CPS’ transgender policies. Instead, the federal magnet programs at high-need schools, including personalized learning and science, engineering and technology classes.
After the federal funding was withheld, CPS used other district reserves and contingency funds to cover some program costs, including after-school programming.
Under the settlement, the Education Department agreed to return the Magnet School Assistance Program funds by Friday (August 28), according to court documents obtained by CBS News Chicago.
"Chicago Public Schools (CPS) has recently received a Notice of Continuation for the Magnet School Assistance Program (MSAP) grant funding and is diligently working through next steps,” a CPS spokesperson told CBS News Chicago. “CPS will continue doing everything possible to support continued, high-quality magnet school programming.
The District said it is working with the U.S. Department of Education to get the funding to schools and students as quickly as possible.
CPS has not said exactly how much money it will receive under the settlement.
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