The Trump administration said it is reneging on a promise to give Maryland schools up to $418 million in pandemic recovery funds, even though some of the money has already been spent.

The action creates at least a $305 million hole in the current year’s education budgets that state and local leaders are now trying to figure out how to fill.

In a letter sent Friday, U.S. Secretary of Education Linda McMahon informed the state that the federal government had changed course, deciding it should not have extended the time that schools had to spend the money. The letter arrived at 5:03 p.m. on Friday and said that all reimbursements would end at 5 p.m., making it too late for Maryland to request any other payments.

The money is now being spent in all 24 of the state’s school systems on initiatives that include tutoring, social-emotional wellness programs and summer learning. Some got approval to use the funds to renovate school buildings. Baltimore City, along with Baltimore, Montgomery and Prince George’s counties, had been given the most funding.

State education officials previously estimated the lost funds totaled about $360 million, but now say it’s closer to $418 million. They said budget implications could be “catastrophic” and that they were told to immediately stop work on any initiatives, construction projects or programs.

“Shock does not begin to describe our reaction when we received the notification late Friday evening, the United States Department of Education had immediately rescinded reimbursements to states and districts for approved pandemic recovery funds for MSDE and Maryland school systems,” said Maryland State School Superintendent Carey Wright.

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Wright is now telling local school systems to stop spending on any ongoing programs until the state can provide more clarification about the situation.

So a tutor who is currently helping students catch up academically may not be in a classroom next week, said Maryland’s school board president Josh Michael.

About $305 million of the money has already been spent.

The remainder — some $113 million — is currently being spent and work will have to stop on those programs so that the state and local schools do not incur further problems.

State education officials have referred the matter to the Maryland Attorney General’s Office.

“We are reviewing the matter and weighing our options. Protecting the State’s schools and Maryland students is a top priority,” said Jennifer Donelan, a spokesperson for the attorney general’s office.

Although much of the money the federal government gave local school systems to blunt the effects of pandemic learning loss was supposed to be spent already, states got extensions to finish spending the remainder on construction projects, teacher recruitment, tutoring and other services for students.

“The federal government is breaking the trust that it has, that it wants held strong, with states across America,” said Michael.

Maryland appeared to be one of a number of states to receive McMahon’s letter, according to The 74, but U.S. Department of Education officials did not respond to questions about the extent of the impact across the country.

Maryland’s state government gave the money to the local school systems based on a contract with the federal education department that said they will be reimbursed, according to Maryland education officials. They could not immediately say whether the state would cover the loss or ask local school districts to give back some of the money that has already been spent.

“It’s going to have to come from somewhere,” said Michael. “We just don’t know.”

Baltimore City schools officials said in a statement that the decision “places an immense financial strain on City Schools and directly threatens critical programs and services that support our students, families, and educators.” The statement said that, like districts across the country, “we planned and committed these funds in good faith.”

In a statement, Prince George’s County school officials encouraged the federal agency to reconsider.

“We have been advised to freeze any remaining spending tied to these funds. Impacts could potentially include halting programs already in progress, cancelling or scaling back mental health services and teacher training and resources, and pausing construction projects indefinitely,” the statement said. “We are financially obligated to pay vendors for goods and services already rendered.”

Anne Arundel County Public Schools has already spent about $108 million in the last batch of pandemic funding. Of that, only about $264,000 remains unreimbursed by the state education department, according Bob Mosier, a spokesperson for the school system.

That funding went to purchase Chromebooks for students.

“It is impossible at this time to say with any certainty what impact this may have on our Fiscal Year 2026 budget,” Mosier said in an email.

Baltimore County school officials had no comment on Monday. Howard County school officials are still trying to understand the impact of the decision, a spokesperson said in an email.

Maryland schools receive $1.6 billion in federal funds annually, less than 10% of their total funding. The state spent more than $9 billion on schools this year, and the city and county governments will spend $8.2 billion.

Gov. Wes Moore issued a statement saying his administration “is deeply concerned” by the decision to deny reimbursement for funds that were already allocated.

“The clawback of these previously committed funds would place an undue burden on our school systems and undermine our collective efforts to strengthen education across the state,” the statement said.

The State of Maryland will appeal this decision, the statement said.

In Annapolis, State Sen. Guy Guzzone, chair of the Senate’s Budget and Taxation Committee, said he was “really surprised” to learn over the weekend of the sudden reversal.

Under Guzzone’s direction, the Senate adopted an amendment to the proposed state budget that would require a special committee of legislative leaders to meet to discuss possible budget solutions should the federal government yank a total of $1 billion from aid to Maryland, whether in education, health care or other areas of the budget.

That process could result in bringing lawmakers back to the State House for a special session to rework the state budget.

“We should be saying to the [Moore] administration: We’re going to work with you. We’re telling you we are ready if something as extreme as this occurs, we’re ready to start looking for solutions,” Guzzone said.

Andy Freeman, a partner at the Brown Goldstein & Levy law firm, said the U.S. Department of Education’s decision to claw back these funds after granting extensions is “outrageous,” and he expects states to sue.

“The state and local school boards, in reliance on that extension, made certain budget decisions,” said Freeman, who currently represents nonprofit organizations who have had grants terminated by the Trump administration. “I think it is unreasonable for the Department of Education to reconsider in a way that interferes with that reliance.”

Freeman said if the federal education department told Maryland’s department that it could use certain funds and the state has spent that money, the state education department would have a “very strong argument” that the federal government must make good on its promise and reimburse that spending.

Freeman thinks the state has “a strong … but not as strong” of an argument if school systems have merely budgeted but not spent the grant money. He added that states should be able to rely on the federal government’s word.

Freeman said the legal case the federal department cited as part of its reasoning concerns the U.S. Food and Drug Administration reconsidering approval of a medical device, which is “very different from approving money that’s been budgeted to be spent for the education of school children.”

Baltimore Banner reporters Kristen Griffith, Brenda Wintrode and Pamela Wood contributed to this article.

About the Education Hub

This reporting is part of The Banner’s Education Hub, community-funded journalism that provides parents with resources they need to make decisions about how their children learn. Read more.