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Settlement Funds Are Intended For Education And Mental Health Services For Young People
By David Carlucci
If you have a teenager in a New York public school, you already lived through one big change this year. The phones go away when the day starts and come back when it ends. That is state law now. A second change is coming, and this one follows your child home.
At the end of August, Meta, the company that owns Facebook and Instagram, agreed to settle a lawsuit brought by New York Attorney General Letitia James and attorneys general in 50 other states and territories. The company will pay the states up to $17.1 billion. New York will receive at least $819 million and as much as $1.15 billion. The Attorney General’s office calls it the largest settlement with a single company in its history.
What the Settlement Does
The settlement does two things. It changes the product, and it sends money to the states. The product changes are what families will notice. Meta has agreed to verify user ages. Anyone under 18 will be capped at two hours a day across Facebook and Instagram, not counting messaging. The apps close to them from midnight to 6 a.m. Notifications stop overnight and are limited during school hours. Teenagers can shut off the algorithm and see only the accounts they follow. Parents can make that the default. Lifting any limit requires a parent’s permission. The restrictions run at least five years and tighten if other platforms agree to similar terms.
What the Money Is For
The Attorney General’s office says the funds are intended for education and mental health services for young people. Eligible uses named so far include grants to help schools go phone-free, training for school mental health staff, after-school and summer programming, the 988 crisis line, and digital literacy programs. Trade reporting on the agreement indicates at least half of the national total must go toward remedial purposes tied to the harms alleged, but that no state must spend a set amount on youth mental health.
In New York, settlement dollars do not spend themselves. The Legislature appropriates them, and that process begins in January. Keep the number in scale. At least $819 million paid over ten years works out to roughly $80 million a year, in a state budget that runs past $250 billion. The statewide phone-free schools program, by comparison, was funded at $13.5 million. This is real money. It is not unlimited money.
What Supporters Say
Supporters point to the scale of the problem. The Centers for Disease Control and Prevention reported that in 2023, almost 40 percent of high school students experienced persistent feelings of sadness or hopelessness, and 77 percent used social media at least several times a day. Attorney General James has argued the platforms fueled rising rates of low self-esteem, isolation and depression among young people, and that the settlement pairs new money with real limits on the platforms. Supporters also note the deal builds on New York’s SAFE for Kids Act, signed in 2024.
What Skeptics Say
Meta denies wrongdoing. The company has said that a safe and productive experience for teenagers is a priority, and that it wants to get this right for parents and teens.
Other objections run the other way. Florida did not sign on, and plans to keep litigating, with its Attorney General arguing the payments are small next to the harm alleged. Researchers also still disagree about how much of the rise in teen distress social media caused rather than accompanied. Critics of the structure also note that no state has to prove a specific child was harmed, and no state has to direct a dollar to treatment.
The closest comparison is the opioid settlements. Companies tied to the opioid crisis will pay roughly $56 billion over the next ten to twenty years, and states have struggled to move that money into treatment. KFF Health News reported in 2025 that one Kentucky county spent $15,000 of its opioid money on an ice rink. One ice rink is not a scandal. It is a warning about what happens without clear rules.
What This Means for New Yorkers
The platform limits arrive on their own. Nobody has to do anything to get them. The money is different. It arrives through Albany, and how it is handled is a choice lawmakers have not made yet.
New York has done this both ways before. In 2021, the state created a dedicated opioid settlement fund with a 21-member advisory board that sends spending recommendations to the Governor and legislative leaders every November. Lawmakers built that structure in part because of concerns about how tobacco settlement money had been spent years earlier. In an earlier round of bank settlements, the State Comptroller’s office reported that a significant share went to general budget support rather than one-time investments.
So the questions worth watching are practical ones. Does New York create a dedicated fund with an advisory board, or does the money flow through existing agency budgets? Do the dollars follow the counties and school districts with the greatest need? Are parents, teachers, counselors, and county officials at the table when the plan is written? And can any of us look up later where the money went?
Lawmakers return to Albany in January. The case is settled. What happens to the proceeds is the next decision, and it belongs to the budget.
David Carlucci consults organizations on navigating government and securing funding. He served for ten years in the New York Senate.
