Ann Arbor Public Schools amended its transgender student policy Wednesday, Aug. 26, under threat of losing $15 million in federal funding.

The board voted to revise Board Policy 5011, which governs how the district handles information about transgender and gender nonconforming students. Trustee Rima Mohammad cast the only dissenting vote. School starts Monday, Aug. 31, with the amended policy in effect.

The U.S. Department of Education (DOE) Student Privacy Policy Office issued a notice Aug. 24 in Case No. 26-0331, directing the district to amend or replace the policy before the start of school. The federal agency alleged the policy violated the Family Educational Rights and Privacy Act (FERPA) by concealing students' gender identity information from parents.

The district denied the allegation in an Aug. 10 response to the federal office, according to the board resolution.

District attorney Richard Landau of Jackson Lewis told the board the stakes were immediate.

"Failing to meet this deadline puts an estimated $15 million in annual federal funding, which supports special education, Title I, and USDA school lunch programs, at immediate risk and exposes us to potential Department of Justice civil litigation," Landau said, according to WEMU.

The board suspended Bylaw 1500, its ordinary policy-change process, solely to adopt the amendment at the Aug. 26 meeting because the normal timeline could not meet the federal deadline.

According to the board resolution, the amended policy adds an explicit FERPA access section. It states that nothing in the policy limits a parent's rights under FERPA. When a parent holds the right of access, the district will not require the student's consent before providing it.

The policy retains language barring school staff from disclosing information that may reveal a student's transgender status in routine communications to anyone without a lawful basis to receive it, unless the student authorizes disclosure or law requires it.

The resolution states the amendment "does not admit that the prior text of Policy 5011 caused or authorized an actual FERPA violation" and "does not waive any objection or defense available to the District."

Mohammad said there were other ways to address the federal accusations without singling out already targeted students, WEMU reported.

Supporters of transgender students sat in protest at the meeting, according to WEMU reporter Kevin Meerschaert.

Ann Arbor is not alone in facing this pressure. Anne Arundel County Public Schools in Maryland updated its gender identity policy Aug. 22 under the same federal FERPA argument, according to The Washington Post. The DOE has been scrutinizing AAPS policies since at least July 1, when WEMU reported federal investigators were examining the district amid a Supreme Court ruling on transgender athletes, though it's unclear whether that inquiry is connected to this week's FERPA case.

The district serves approximately 16,871 students across 32 schools.