The U.S. Department of Education has confirmed $208 million in new grant awards for school-based mental health programs, $120 million of which will specifically go to rural school districts.

The funds will be distributed across 65 recipients – 33 rural school districts and 32 metropolitan districts – and aim to boost the headcount of credentialed mental health providers, which has decreased since 2021, according to KFF data.

Earlier this year, the Department of Education rescinded $1 billion, halting the renewal of more than 200 school mental health grants due to discrepancies identified by the Trump administration regarding diversity, equity and inclusion initiatives.

While $208 million is a drop in the bucket compared to the $1 billion cut, Department of Education officials doubled down on their decision and previous criticism of DEI and Biden administration mental health priorities. 

“Under the Biden administration, it was more important to shape the racial and gender identities of mental health providers than it was to focus resources on high-quality, credentialed school psychologists who are best positioned to serve American students when they are at their most vulnerable,” U.S. Secretary of Education Linda McMahon said in a statement. “While there was doubt that the Trump administration could right this wrong and recompete these dollars before the end of the year, we are proud to announce that we did exactly that. Today, over $200 million is being awarded directly to states and school districts to support student mental health – a meaningful win for our education system.”

The $208 million in grant funding will go to programs that support rural and high-need areas, lower student-to-school psychologist ratios, provider recruitment and retention, as well as efforts to strengthen the school-based mental health workforce. 

However, some of the new parameters to limit hiring to credential psychologists vs. master’s level clinicians could “hamstring districts in providing cost-effective and impactful mental health intervention in the school setting and make it more difficult for schools to actually meet student mental health needs that impact and interfere with all students’ education,” Nina Kaiser, the founder of Practice San Francisco, told Behavioral Health Business.

Practice San Francisco is a mental health and wellness center that serves families, schools and employers.

“The new grants being awarded by the Department of Education are a clear indication that mental health needs are an ongoing challenge in school settings, but fall far short of the rescinded funding that already was inadequate to meet student mental health needs,” Kaiser said. “In addition, the new grant requirements reflect a lack of understanding of the on-the-ground needs of schools and the way in which school mental health supports operate.”

Dr. Sarah Davidon, a senior policy advisor at Georgetown University School of Medicine who specializes in children’s mental health, echoed these comments.

“I see this news as both encouraging and unstable,” Davidon told BHB. “The $208 million investment shows the growing mental health needs of students. The $208 million investment also shows the growing mental health needs of the school staff across the nation. However, the investment follows an announced $1 billion in grant cuts, highlighting the uncertainty schools are dealing with now. Inconsistent funding can break long-term planning, the workforce stability and trust among school districts that try to build sustainable mental health supports.”

Davidon is also the deputy ombudsman for the Colorado Department of Human Services’ Behavioral Health Access to Care division.

After its push this spring to discontinue grants that fund DEI-related mental health initiatives in schools, the Department of Education was sued by 16 state attorneys general. Since then, the department has relaxed some of its non-continuation criteria, but the litigation is ongoing.

As part of the new grant funding, eligibility requirements were reworked, where money will only be sent to state or local agencies that then partner with colleges and universities rather than directly giving the funds to higher education institutions, which has been a contentious point between several schools and the Trump administration since taking office.

“This update ensures that state and local school leaders are in the driver’s seat when it comes to determining the best approach for meeting their students’ unique needs,” the Department of Education’s Dec. 11 update reads.

The announcement comes just two weeks after the Trump administration asked a Ninth Circuit Court of Appeals panel to halt an order from a lower court that prohibited it from canceling the $1 billion in funding for school mental health services. The Ninth Circuit rejected that request.

“The key question now is whether this investment will have clarity, continuity and technical support,” Davidon said. “To implement school mental health support effectively, school districts need to know that the resources will not be pulled out midstream.”