Special Education Layoffs: Canceled Grants, Court Fights, and the HHS Move

The federal special education layoffs of October 2025 cut 121 of 135 employees from the Office of Special Education and Rehabilitative Services and 137 staff from the Office for Civil Rights, leaving the offices that enforce the rights of more than seven million students with disabilities nearly empty.¹ A shutdown-ending spending deal brought those workers back on paper in November, but only through January 30, 2026, and the administration has since begun moving special education functions out of the Education Department entirely.

What Was Cut in October 2025

On October 10, 2025, the Department of Education issued reduction-in-force notices to 466 employees as part of a broader downsizing that hit roughly 4,200 federal jobs.² Inside the Office of Special Education and Rehabilitative Services, only the two most senior staff members remained in the Office of Special Education Programs after the cuts, and just one employee remained in the Rehabilitation Services Administration, according to the National Association of State Directors of Special Education.³ The Rehabilitation Services Administration had previously coordinated funding and technical assistance for more than 870,000 vocational rehabilitation clients a year.⁴

The notices went out during the 43-day federal government shutdown that began October 1, 2025.⁵ The administration attributed the firings to the “Schumer Shutdown” and said it would “follow all applicable laws.”¹ The National Education Association said the shutdown was used as cover for workforce reductions the administration had been pursuing for months.⁶

Why These Offices Matter

The Office of Special Education Programs administers the Individuals with Disabilities Education Act, the federal law guaranteeing children with disabilities a free appropriate public education. IDEA served about 8.4 million infants, toddlers, children, and young adults with disabilities as of 2023, with roughly $15.5 billion in annual federal funding covering about 10% of the per-student cost of special education.⁷

OSEP’s day-to-day work includes distributing formula grants to states, reviewing state compliance data, opening investigations when states fall short of IDEA requirements, providing technical assistance, and answering parents’ calls about their children’s rights.² That oversight was already stretched before the cuts. As of 2025, only 20 states and territories met IDEA Part B requirements for students ages 3 through 21, and only 31 met Part C requirements for infants and toddlers.⁴

What It Means for Students and Families

No federal laws changed. IDEA is still in force, and Individualized Education Programs and Section 504 plans remain legally binding documents carried out at the local level.⁸ The problem is enforcement. With the federal office nearly empty, there is no one at the federal level to monitor whether states and districts are actually following the law.

Before the layoffs, the Education Department could step in when schools delayed IEP meetings or denied required services. Parents who hit those problems now are more likely to be left with state complaint processes or private attorneys. The most recent batch of IDEA funding had already been disbursed to states before the layoffs took effect, so money for the upcoming year was expected to flow.⁸ Audrey Levorse of the National Association of State Directors of Special Education asked, “Who will monitor expenditures to ensure federal requirements are being met?”⁹

Civil rights complaints are in similar shape. By 2025, 90% of student discrimination and harassment complaints filed with the Office for Civil Rights were being dismissed, according to reporting by The 19th.¹⁰ The roughly 120 OCR employees who remained after layoffs faced a projected caseload of nearly 190 cases each.⁴ Chad Rummel of the Council for Exceptional Children compared the situation to “mandating a speed limit, but failing to post signs or implement enforcement measures.”⁹

Canceled Grants

Separate from the workforce cuts, the Department of Education canceled 25 competitive grants funded under IDEA Part D, representing over $30 million across 14 states. The affected grantees included 12 universities, five state education departments, three small nonprofits, and the nation’s oldest school for the blind. The department also terminated nine Rehabilitation Services Administration grants worth $3.6 million for Braille and interpreter training.¹¹

The cancellation notices cited language in grant applications referencing diversity, equity, and inclusion, racism, and recruitment of “underrepresented and historically marginalized groups.” Department officials said each project “is inconsistent with, and no longer effectuates, the best interests of the federal government.”¹¹ Four deafblind technical-assistance projects serving about 1,365 children and their families across Washington, Oregon, Wisconsin, and a New England consortium were among the terminated programs.¹²

The Court Fights

On October 15, 2025, U.S. District Judge Susan Illston of the Northern District of California temporarily blocked the layoffs in a case brought by the American Federation of Government Employees and AFSCME against more than 30 federal agencies. Illston found the unions were likely to prove that the administration’s use of the shutdown to carry out layoffs was “both illegal and in excess of authority and is arbitrary and capricious.”¹³

That ruling ran into a Supreme Court decision from earlier in the year. On July 14, 2025, the Court issued an unsigned emergency order in McMahon v. State of New York staying an injunction from U.S. District Judge Myong Joun that had blocked the department’s broader reduction in force and would have required reinstatement of about 1,400 terminated employees.¹⁴ Justice Sonia Sotomayor wrote in dissent that the ruling “hands the Executive the power to repeal statutes by firing all those necessary to carry them out.” Joun had found in May 2025 that the evidence “reveals that the defendants’ true intention is to effectively dismantle the department without an authorizing statute.”¹⁵

In a parallel case, the Victim Rights Law Center sued over the layoff of more than 250 OCR employees. Judge Joun issued a preliminary injunction in June 2025 requiring reinstatement, and by September 85 employees had returned to work with plans to bring back 60 more every two weeks.¹⁶ On September 29, 2025, the First Circuit reversed, ruling that the Supreme Court’s McMahon decision required the same result for OCR staff.¹⁷

In June 2026, California, Rhode Island, and Wisconsin filed suit in the Northern District of California challenging the cancellation of State Personnel Development Grants under IDEA. The states alleged the department relied on unpublished policy priorities hostile to diversity and equity initiatives, violated the Administrative Procedure Act by skipping public notice and comment, and gave no reasoned explanation for the terminations.¹⁸ That case remains pending.

The Shutdown Deal and the January 30 Cliff

When the 43-day shutdown ended on November 12, 2025, the spending deal required the administration to reverse the October layoffs and prohibited further firings through January 30, 2026.¹⁹ The 121 OSERS employees and 137 OCR employees were returned to employment status retroactive to September 30.¹

The return was uneven. A union representing Department of Education employees reported that as of November 14, many staffers remained locked out of their computers and agency email accounts.⁵ Union president Rachel Gittleman said, “We have no confidence that the U.S. Education Department will follow the terms of the continuing resolution or allow the employees named in October firings to return—or even keep their jobs past January.”¹⁹ The funding package guaranteed jobs only through January 30, 2026.

Moving Special Education to HHS

On June 16, 2026, the Department of Education announced it was transferring its special education and civil rights functions to other federal agencies through interagency agreements. The Office of Special Education Programs and the Rehabilitation Services Administration are being moved to the Administration on Disabilities, a sub-agency of the Department of Health and Human Services. Civil rights enforcement is going to the Department of Justice’s Civil Rights Division.²⁰

By mid-2026, more than 100 K-12 and higher education programs had been relocated to five agencies: the Departments of the Interior, Labor, State, Treasury, and HHS.²¹ The administration has described the moves as a “proof of concept” meant to build legislative support for fully dissolving the department.²⁰ Education Secretary Linda McMahon has described her mission as “shrinking the department as much as possible” and “scaling back federal micromanagement” to return authority to the states.²²

Critics argue HHS operates under a medical model of disability management that could undermine IDEA’s focus on education and a free appropriate public education.⁴ Carrie Gillispie of New America said the transition has left “timely access to services for babies, children, and young adults with disabilities” mired in bureaucratic complications.¹⁰ The administration has also proposed converting IDEA into a block grant combined with other federal education money, which critics say would reduce accountability.

Congressional Pushback

A coalition of more than 200 disability, civil rights, and education organizations, including the Autistic Self Advocacy Network, the Council for Exceptional Children, the National Disability Rights Network, The Arc, and the National Education Association, issued a joint statement condemning the layoffs on October 14, 2025. The coalition called the firings a “crisis” that threatened to “catapult” students with disabilities “back to a time of segregation and refusal to provide educational opportunities.”²³

On October 20, 2025, Representative Angie Craig and 116 House colleagues sent a letter to OMB Director Russell Vought and Secretary McMahon demanding the administration rescind the termination notices, saying the firings “will have a devastating impact on the more than 7.5 million students with disabilities across the country.” Craig cosponsored the Protecting Students with Disabilities Act (H.R. 2333), which would prohibit the use of federal funds to eliminate or consolidate any Education Department office administering IDEA programs.²⁴ A companion bill was introduced in the Senate by Senator Angela Alsobrooks and referred to the Committee on Health, Education, Labor, and Pensions. Neither bill has advanced beyond committee.²⁵

Lawmakers included nonbinding language in the fiscal 2026 spending bill asserting that the department lacks the authority to transfer its functions to other agencies, and the House has moved to deny the administration’s request to make certain transfers permanent.²⁰ A key Senate panel is also weighing legislation to block the special education transfer.²⁶ For now, the laws protecting children’s right to a special education are intact, but the federal machinery built over half a century to enforce them has been largely dismantled, and its new home at HHS is still taking shape.

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