WASHINGTON, United States (AFP) – President Barack Obama’s administration fired the latest salvo Friday in a heated battle over the rights of transgender Americans, telling schools they must allow students to use bathrooms of their choosing.

In a letter to school districts and universities, officials from the Justice and Education Departments outlined how to prevent discrimination against transgender students and what Attorney General Loretta Lynch described as “unjust” school policies.

Although the letter is not binding, schools that disagree with the administration’s interpretation — allowing transgender students to use either the bathroom corresponding to their gender identity or the one on their birth certificate — could potentially face lawsuits or reduced federal aid.

The guidance comes as the federal government is embroiled in a pitched legal battle in North Carolina — with both the state and the administration filing dueling lawsuits — over the state’s law requiring transgender people to use public restrooms corresponding to the sex listed on their birth certificate.

The battle comes amid a wider debate on equal rights in the United States, where a flurry of initiatives have targeted the lesbian, gay, bisexual, transgender (LGBT) communities since a historic Supreme Court decision last year legalized same-sex marriage nationwide.

“There is no room in our schools for discrimination of any kind, including discrimination against transgender students on the basis of their sex,” Lynch said in a statement.

The administration insists that gender identity is protected under Title IX, a provision under the Education Amendments of 1972 that bars schools receiving federal funding from discriminating based on a student’s sex.

Under the guidance, schools must “take prompt and effective steps” to end, prevent and remedy sex-based harassment based on a student’s actual or perceived gender identity, transgender status or gender transition.

Schools are also asked to treat students “consistent with their gender identity,” allow them to participate in sex-segregated activities and access sex-segregated facilities in line with their gender identity, as well as protect their privacy as concerns their transgender status.