On Monday, July 27, 2026, the U.S. Department of Education announced it is coming after Ann Arbor Public Schools in Michigan — and the penalty on the table is the district's federal funding.

The offense? The district has a policy saying school staff shouldn't disclose a student's transgender status without that student's permission.

What the government is demanding

The Education Department's Student Privacy Policy Office determined that Ann Arbor's policy "requiring school employees to hide a child's 'transgender status' from his or her parents likely violates FERPA" — the Family Educational Rights and Privacy Act.

Per reporting from Michigan Advance, the department gave the district until August 10 to explain why it and the Justice Department shouldn't move to enforcement. FERPA violations can end an institution's federal funding.

The department is also demanding the district justify keeping records about a student's gender identity in a separate file.

Assistant Attorney General Harmeet K. Dhillon: "School districts that hide information from parents are violating federal law. FERPA is not optional."

Education Secretary Linda McMahon called the policies "an affront to basic moral principles," and said the two departments "will use every tool available to hold them to account for this egregious behavior."

The law doesn't say what they're saying it says

Here's the problem with all that certainty.

FERPA is a records access law. It gives parents the right to see their child's education records, to ask that they be corrected, and to control the disclosure of information in them. That's what it does.

It is not, on its face, a mandate that schools proactively report things to parents. As Chalkbeat reported, a FERPA expert put it this way: the law requires districts to hand over written records — like a gender support plan — if a parent asks for them, but FERPA "doesn't appear to create a duty to proactively disclose that students are expressing a different gender at school."

That's a meaningful difference. Ann Arbor's policy doesn't say records are hidden from parents who request them. It says staff won't volunteer a student's gender identity without the student's say-so.

The administration is stretching a privacy statute into an outing requirement — and then threatening a district's funding over the stretch.

What the policy actually says

Worth reading the district's own words rather than the press release's characterization of them:

"The Superintendent shall ensure that all personally identifiable and medical information relating to transgender and gender nonconforming students shall be kept confidential in accordance with applicable state, local, and federal privacy laws. School staff shall not disclose any information that may reveal a student's transgender status to others, including the student's parents or guardians and other school staff, unless legally required to do so or unless the student has authorized such disclosure."

Note "unless legally required to do so." The district built in compliance with the law. And note that the confidentiality applies to other school staff too, not just parents — this is a privacy rule, not a scheme against families.

The policy also directs staff to use a student's legal name and birth-assigned pronoun unless the student, parent, or guardian has specified otherwise.

Why the confidentiality exists

Supporters of these policies aren't trying to cut parents out of their kids' lives. Most trans kids do tell their parents.

The policies exist for the kids whose parents aren't safe. As the reporting notes, forced-disclosure rules can endanger students with unsupportive parents — physically and emotionally. A school counselor who is legally required to report a kid's gender identity home is a counselor that kid will never talk to again.

That's the practical result here: not more informed parents, but fewer kids willing to tell an adult at school anything at all.

This is a campaign, not a one-off

Ann Arbor isn't a random target.

• In March 2025, McMahon sent a letter to state superintendents saying the department would "insist that schools apply FERPA correctly," and that compliance means schools "must allow parents to review all education records of their student, including any document related to a student's 'gender identity'."
• In June, the Education Department and the Justice Department formed a partnership specifically focused on privacy policies and parental rights — the same partnership now aimed at Ann Arbor.
• Ann Arbor was already under a Title IX investigation by the department over letting students compete on teams and use locker rooms matching their gender identity.

So one district is facing two federal investigations at once, both about transgender students, from an administration that set up an interagency task force for exactly this purpose.

The bottom line

A federal agency is threatening to pull the funding that pays for teachers, buses, meals and special education in a Michigan school district — over a confidentiality rule protecting a small number of vulnerable kids, under a reading of a privacy law that privacy experts don't share.

Every student in Ann Arbor has a stake in that funding. None of them had a say in this fight.

"Parents' rights" is a real principle worth taking seriously. But a policy whose actual effect is to make school staff report on children, and whose enforcement mechanism is defunding a whole district, isn't about parents. It's about using kids as leverage.

Source

This post is based on reporting by Katherine Dailey for Michigan Advance / States Newsroom. Photo by Shauneen Miranda/States Newsroom.