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Chicago joins suit against Betsy DeVos over coronavirus relief funds, says CPS could lose $10 million to private schools

Chicago Public Schools is now part of a federal lawsuit in which several cities and states are seeking to prevent private schools from getting a share of coronavirus relief bill funding they say would be harmful to public school districts.

The lawsuit seeks to overturn federal guidance and a rule announced in June that gave local districts a choice: Provide pandemic relief funds to all public schools but give a bigger portion than is customary to private institutions, or limit the public schools receiving funds to those with Title I status, meaning at least 40% of students come from low-income households.

CPS estimates it could lose about $10 million to private schools of the $205 million it’s expecting from the federal CARES Act. That’s part of the $570 million total allotted for Illinois schools and $13 billion for schools nationwide through the Act’s Elementary and Secondary School Education Relief Fund.

“Chicago Public Schools has joined a multi-state lawsuit to prevent millions of dollars in CARES Act Funding from being misallocated from public school students who are most in need of support,” according to a CPS statement.

“The devastation of the COVID-19 pandemic has disproportionately impacted low-income students of color and the Trump Administration is turning its back on these students in favor of wealthy private institutions by siphoning public funds away from the students who Congress intended to support,” the statement continued.

The court filing against the U.S. Department of Education and Education Secretary Betsy DeVos, submitted July 7 and last amended Friday, states that measures they implemented would divert money meant for public schools to private groups and claims the Education Department “unlawfully and erroneously” interpreted the act.

Once states get their share of the emergency relief fund, they’re supposed funnel at least 90% of the money to eligible local education agencies, such as school districts or charter schools that received Title I funding during the 2020 fiscal year.

Under the coronavirus aid bill, Congress assigned local districts to distribute funds to private schools in the same way they usually would under the Elementary and Secondary Education Act. That act mandates that educational expenditures for eligible private school students must be “equal to the proportion of funds allocated to participating school attendance areas based on the number of children from low-income families who attend private schools.”

But on June 25, when DeVos announced a rule dictating how local education agencies calculate emergency funds for private schools, she said, “CARES Act programs are not Title I programs.”

The rule stipulates that if a district wants coronavirus aid bill funding to reach all of its public schools, it has to calculate private school funding based on total private school enrollment within the district. Or if a district chooses to use the relief funding only for Title I schools, then it can calculate equitable services based on the number of low-income students in participating private schools.

The lawsuit contends that the rule disproportionately benefits private schools at the expense of public school students, who are more likely to come from low-income households.

The Department of Education, which declined to comment on pending litigation, has until July 29 to file a response with the court.

“The Secretary has said many times, this pandemic affected all students, and the CARES Act requires that funding should be used to help all students,” Department of Education press secretary Angela Morabito said in a statement provided to the Tribune. “There is no reasonable explanation for debating the use of federal funding to serve both public and private K-12 students when federal funding, including CARES Act funding, flows to both public and private higher education institutions.”

Using the usual formula, CPS would have set aside $18.5 million of the coronavirus relief bill money for private school students, according to documents filed with the lawsuit. But the federal rule would require CPS to either reserve nearly $28.7 million of the funds for private school students, or leave 66 public schools in Chicago without any relief money, according to the filing.

“At a time when Chicago faces a substantial deficit in its education budget as a result of the pandemic, the (district) will be required to find $10 million to fill the budgets of public schools that the CARES Act funds were intended to fill,” according to a declaration by CPS CEO Janice Jackson, included in the court filing.

More than 17,000 Chicago private school students were eligible for equitable services under Title I last school year but will get less if the coronavirus relief bill funds are spread out among all private school students, according to Jackson’s declaration.

Other plaintiffs include the states of California, Michigan, Hawaii, Maine Maryland, New Mexico, Wisconsin and Pennsylvania, the District of Columbia, and boards of education in New York, Cleveland and San Francisco.

Through the litigation, they seek to end the private school rule, starting with a preliminary injunction, and “redress harms to their interests as recipients of CARES Act emergency relief funding.”

The Department of Education’s “rewrite of the allocation method and eligibility of private-school students shifts a significantly higher percent of CARES Act funding to private schools, leaving the public schools with less funding to respond to the pandemic,” the lawsuit states.

hleone@chicagotribune.com