The Trump administration announced interagency agreements to move key Department of Education programs into other federal agencies, dividing responsibility for workforce grants, K‑12 and postsecondary programs across Labor, Interior, HHS and State. Officials billed the reassignments as a return of authority to states and a streamlining of services. Critics and a coalition of districts and unions have sued, arguing the outsourcing is unlawful and will disrupt grant delivery and services to students, while Democratic lawmakers say program handoffs are causing delays and confusion for grantees. The legal challenge targets the legality of the transfers and warns of operational harm to K‑12 and higher‑education recipients. Universities and system leaders are monitoring the litigation and administrative shifts closely because change in grant managers could complicate compliance, reporting and ongoing program implementation across institutions.