ASG faces mixed outcome as USDOE restores part of ARPA funds access

Pago Pago, AMERICAN SAMOA — The USDOE, as of June 26, 2025, in a letter from Secretary of Education Linda McMahon has restored the previous liquidation process to all states and territories that had been approved for late liquidation prior to March 28. The letter notified all states and territories that USDOE is “going back to the ESSER/ARP payment process that was in place prior to the March 28, 2025 letter for the duration of the court battle.”

Practically, this means that any project that had a late-liquidation extension approved as of March 28 could once again request reimbursements and liquidate funds, up until further notice.

In other words, the funding spigot has been turned back on for previously green-lit extensions, leveling the playing field so non-plaintiff territories like American Samoa were no longer at a disadvantage versus the plaintiff states.

However — crucially — this restoration does not automatically approve any new extension requests that had been denied in the interim. It only revived the status quo from before the March 28 memo, covering “previously approved late liquidation projects or programs as of March 28, 2025.”

This means it does not include the 14 ASDOE projects that were denied an extension to complete in a letter, dated May 8, 2025, signed by Principal Deputy Assistant Secretary and Acting Assistant Secretary of OESE, Hayley B. Sanon.

To understand the reference in McMahon’s letter to “duration of the court battle”, the timeline of the US national extension battle and legal challenge follows:

The clash over ARPA education fund deadlines in American Samoa is part of a larger national dispute. Below is a timeline of key events that put the territory’s projects in limbo:

•        September 30, 2024 – Obligation Deadline: Final date by which ARPA education funds had to be obligated (committed) under federal law. American Samoa obligated its full ARPA-OA education grant by this date. The liquidation deadline – when payments must be made – was initially 120 days later on January 30, 2025.
•         December 2024 – Extension Approved: USDOE granted American Samoa (and 40+ other states/territories) an extended liquidation deadline to March 28, 2026 for ARP education funds. This was meant to accommodate delays in procurement, construction, and other pandemic-related hurdles.
•         March 28, 2025 – Extensions Revoked: In a surprise policy reversal, Secretary McMahon notified all chiefs that all prior late-liquidation approvals were rescinded effective immediately. Going forward, extensions would only be granted case-by-case per project, with strict criteria tied to COVID-19 educational impact. This decision – described by some state leaders as “arbitrary and capricious” – created a funding crisis for many jurisdictions that had counted on the extra year+ to complete projects.
•        April 10, 2025 – Lawsuit by 17 Jurisdictions: A coalition of 17 states and Washington, D.C. (led by New York’s Attorney General) filed suit in U.S. District Court (SDNY) against Secretary McMahon and USDOE. The lawsuit argued that rescinding the extensions was unlawful and would force states to abandon important education projects. American Samoa was not a plaintiff in this case.
•         May 6, 2025 – Injunction for Plaintiff States: A federal judge granted a preliminary injunction blocking USDOE from enforcing the March 28 rescission for the 17 suing jurisdictions. The court found those states showed a likelihood of success on claims that the sudden cut-off violated administrative law. USDOE was enjoined from implementing the new policy in those places, effectively allowing the plaintiff states to keep spending on previously approved projects past the original deadline.
•         May 11, 2025 – New Deadline for Plaintiffs: In response to the injunction, Secretary McMahon informed the plaintiff states that their extensions would terminate on May 24, 2025 (a date 14 days out). This notice – giving two weeks to wind down projects – complied with the court’s requirement of advance notice. The 17 jurisdictions were told to use that time to finish or halt work.
•        June 3, 2025 – Injunction Extended: The preliminary injunction was extended beyond May 24 as litigation continued. On June 20, the Second Circuit Court of Appeals denied USDOE’s motion to stay the injunction, ensuring the plaintiff states could keep accessing funds during the appeal. In effect, by June the plaintiff states were still able to draw down ARPA education funds for their extended projects, while non-plaintiff states/territories like American Samoa had been cut off since March 28.
•         June 26, 2025 – USDOE Reverses Course (Partially): Facing ongoing litigation and inconsistent rules, Secretary McMahon issued a letter on June 26 restoring the previous liquidation process nationwide – but only for projects that had been approved for late liquidation prior to March 28. The letter notified  all states and territories that USDOE is “going back to the ESSER/ARP payment process that was in place prior to the March 28, 2025 letter for the duration of the court battle. “

RESTORATION OF FUNDS ACCESS AND ASG’S REACTION

Following McMahon’s June 26 policy reversal, American Samoa’s leadership moved quickly to clarify what it means for the territory. Governor Pulaali’i N. Pula announced that American Samoa “can again access [its] American Rescue Plan Act education funds” that were previously on hold.

Essentially, ASDOE is now permitted to resume drawdowns and payments for any project that had already been approved for extended liquidation before the March 28 cutoff.

This includes a range of initiatives that were in progress and had received the green light last year to continue into 2025–2026. As a result of the June 26 letter, those projects are no longer frozen: ASDOE can submit reimbursement requests under the original extension framework, and the U.S. Education Department will honor them (at least while the court injunction remains in effect).

The ASG welcomed this development. In a June 26, 2025 press release, the Governor and Lt. Governor thanked Secretary McMahon for restoring the territory’s access to its education funds.

“This decision allows the American Samoa Government to resume submitting eligible funding requests under the process used before the Department’s March 28 letter,” the Governor noted in the statement. He expressed gratitude that American Samoa is “no longer being left behind” as the only group unable to use its allotted ARPA resources.

ASG officials also acknowledged the support of the USDOE leadership in responding to concerns raised by non-plaintiff territories, even as the lawsuit by states continues.

The June 26 policy change came just in time to prevent further disruptions: for example, summer school programs and curriculum contracts that had been in limbo since April can now proceed using ARPA funds that were already obligated for those purposes.

Local leaders, however, balanced their thanks with caution.

Governor Pula emphasized that the restored access only applies to projects that had prior approval – it does not reinstate the 14 disqualified projects that USDOE explicitly denied on May 8. Those projects, mostly capital improvements, remain ineligible for ARPA funding unless Washington changes its stance.

“We are grateful for the ability to move forward with many critical initiatives,” the Governor said, “but we continue to appeal for fairness on the remaining projects that are still left out.”

ASG noted that it has formally appealed the May 8 denials and will press its case that these school facility projects are indeed tied to pandemic recovery (for instance, by enabling social distancing and addressing learning environment deficits exacerbated by COVID closures).

The fate of those appeals is uncertain – as of late June, the USDOE has not indicated any reversal, meaning the $38 – 42 million in disqualified projects are in budgetary limbo.

And, unless the USDOE grants the appeals or otherwise revisits its May 8 determinations, American Samoa cannot use ARPA funds for those disqualified initiatives.

Samoa News will report in the upcoming week on the possible consequences to American Samoa of ‘clawback” as it relates to the ASDOE disqualified projects that are currently in budgetary limbo.