The U.S. Department of Education has threatened enforcement action against two school districts over policies involving transgender students.

US Threatens Funding Cuts Over School Transgender Policies

WASHINGTON — July 27, 2026

The U.S. Department of Education has warned two public school districts that they could lose federal funding over policies involving transgender students, marking the latest move by President Donald Trump's administration to reshape federal policy on gender identity in schools.

The department said it is working with the U.S. Department of Justice to review the districts' policies and that possible enforcement measures could include legal action and the suspension of federal funding.

Federal officials accused Anne Arundel County Public Schools in Maryland of violating the Family Educational Rights and Privacy Act (FERPA) by treating information about a student's gender identity as confidential and limiting when it can be shared with parents.

The department also said Ann Arbor Public Schools in Michigan may be violating the same federal law through a policy it says allows school staff to withhold a student's transgender status from parents under certain circumstances.

Anne Arundel County Public Schools said it first learned of the federal government's findings through the public announcement and had not yet received formal documentation supporting the allegations. The district said it would review any official information once it is received and respond through the appropriate process.

Ann Arbor Public Schools did not immediately comment on the Education Department's announcement.

The Education Department said it plans to begin enforcement proceedings against Anne Arundel County Public Schools. It also gave Ann Arbor Public Schools until August 10 to explain why similar action should not be taken against the district.

Since returning to office, President Trump has signed several executive actions affecting transgender rights and directed the federal government to recognize only two sexes, male and female, for federal policy purposes.

The administration has also sought to withhold federal funding from educational institutions over issues including diversity initiatives, climate-related programs and campus protests connected to the Israel-Gaza conflict.

Civil rights organizations argue that such federal actions could undermine academic freedom, free speech and due process protections. The legal disputes surrounding these policies are expected to continue as the administration pursues its education agenda.