# Federal Judge Blocks Trump Administration from Canceling Grants Over Priority Shifts Judge rules administration cannot terminate grants solely due to changing agency priorities. - **Source:** [The College Investor](https://brifing.si/source/d431d77d-492e-4105-be7c-2525bbb643ab) - **Published:** 2026-07-21 - **Original article:** - **On Brifing:** https://brifing.si/s/bdd2291c-4412-445b-aebb-31f02c2c6194 ## Ruling Summary A federal judge ruled the Trump administration cannot cancel federal grants simply because priorities changed. The decision protects $5.39 billion in grants across 20 states, DC, and three governors who sued. Judge Indira Talwani stated OMB's 'Termination Clause' does not permit cancellations based on new priorities. ## Legal Basis The court emphasized 2 C.F.R. 200.340's 'Termination Clause' only allows cancellations based on program goals disclosed at award time. Citing the Constitution's Spending Clause, it stressed federal funding conditions must be unambiguous, enabling informed state decisions before acceptance. ## Affected Grants Plaintiffs documented cancellations including University of Wisconsin-Madison research grants, DOJ hate crime program awards, and a $26 million USDA grant to Illinois for school food programs. Over 1,180 active grants totaling $5.39 billion were impacted. ## Decision Scope The ruling removed legal grounds for priority-based terminations but didn't restore already canceled grants. Plaintiffs sought no damages. Two alternative claims remain pending, and the administration may appeal to the First Circuit. ## Future Implications Agencies can still terminate grants for noncompliance, mutual consent, or failure to meet original goals. This sets a key precedent amid litigation over federal education/research funding, particularly crucial for universities and state education agencies. ## Broader Context The decision clarifies policy shifts alone can't justify grant cancellations, stabilizing education/research funding. While appeals may prolong the process, it provides immediate relief for states and institutions dependent on federal grants. ## Sources covering this story - https://thecollegeinvestor.com/84806/federal-judge-rules-trump-administration-cant-cancel-grants-over-new-agency-priorities/ — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._