The Minnesota Department of Education (MDE) will pay $3.2 million to settle a class-action lawsuit alleging the state illegally cut short special-education services to as many as 3,200 students.

The suit involved two students whose services were halted on July 1 after they turned 21 years old. It was taken up in 2020 by the Minnesota Disability Law Center, which argued that federal law requires instruction be provided to special-ed students up to their 22nd birthday.

U.S. District Court Judge Patrick Schiltz ruled in the students' favor last summer, and the two sides commenced talks leading to a settlement agreement filed in May.

Students will not get cash payments but instead are eligible for classes and other supports designed to help them to live independently, said Sonja D. Peterson, staff attorney for the Minnesota Disability Law Center, who cited as examples: "Courses like maintaining your home. Using your bank account," she said.

Peterson added that the classes are likely to be taught by organizations like the PACER Center and The Arc Minnesota, which would be reimbursed from the settlement fund.

MDE continued to deny wrongdoing as part of the settlement, but it agreed that students who turned 22 between 2020 and 2023 stood to "benefit most by receiving compensatory services as soon as possible," the settlement agreement states.

At the time of Schiltz's ruling, Maren Hulden, then the supervising attorney of the Disability Law Center, noted that the students had been denied services during the COVID remote-learning lockdown.

"Negative impacts for special education students meant their learning was cut in two ways: One, they were denied the experiential settings inherent to transition learning, and two, their eligibility timeframe was less than what federal law requires," she said in a September 2023 news release.

Hulden now serves as general counsel for MDE.

In its defense, MDE had argued that students with disabilities were treated the same as students without disabilities under state law at the time, and that Minnesota offered traditional secondary schooling to students without disabilities only until their 21st birthdays.

State law has since been changed to comply with the federal law.

MDE now is preparing to release the names of students who may be eligible to take part in the agreement to Continental DataLogix LLC, the firm that will handle the claims.

Students have until July 15 to notify MDE that they do not want their information disclosed or that they object to the agreement. Details are at: https://education.mn.gov/MDE/about/prod084332.

According to the agreement, 20% of the settlement fund, or $640,000, will go to attorneys' fees and administrative expenses, leaving $2,560,000 to cover the claims being filed. Any funds that remain six-plus months after the distribution period will be split equally between The Arc Minnesota, the Autism Society of Minnesota and the Multicultural Autism Action Network, the agreement states.