Arizona schools again face threat of lost federal funding over DEI initiatives

PHOENIX – Arizona Superintendent of Public Tom Horne said Tuesday that new federal guidance means schools that don’t comply with anti-DEI policies will lose funding, despite a recent court ruling to the contrary.

Last year, a federal judge barred the U.S. Department of Education from withholding education funding over diversity, equity and inclusion initiatives.

But the U.S. Department of Education released new guidance last week saying it would withhold funding from schools with policies that prevent or otherwise deny participation in constitutionally protected prayer and religious expression.

The guidance includes references to a 2024 U.S. Supreme Court decision (Mahmoud v. Taylor) that ruled public schools with material that endorses concepts like gay marriage and transgender identities undermine the religious exercise of parents.

Horne explains why new guidance covers DEI

The new guidance doesn’t specifically mention DEI, but Horne argued that diversity, equity and inclusion initiatives fall into the restricted material category.

“The federal government issued a guidance that said that if you want to get federal funds, you have to not do things in classrooms that are offensive to people’s religions,” Horne told KTAR News 92.3 FM.

The federal government didn’t appeal after a U.S. District Court judge ruled in August 2025 that the Trump administration could not withhold funding over DEI initiatives.

Until the ruling, Horne had used the looming threat to encourage schools to comply with orders to remove DEI language from websites and curriculum.

He suggested Tuesday that the new guidance was the U.S. Department of Education’s way of sidestepping the court ruling.

“I think that at the time they said they weren’t appealing that decision, one of the people in the federal government said we have other ways to get it, and I think this is what they had in mind,” he said.

Under the new federal guidance, state education departments have to submit annual compliance reports to the U.S. Department of Education.

Schools were originally pushed to sign forms saying they were following President Donald Trump’s executive order to remove DEI language in April 2025.

Since then, the Arizona State Board of Education voted to review and edit the Arizona Professional Teaching Standards and the Structured English Immersion Endorsement Course Frameworks. The potential loss of federal funding was a large factor in that vote.

Horne says the new guidance is not that different from the original DEI forms.

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