The Obama administration issued a directive early Friday to all U.S. public school districts to allow transgender students to have access to bathrooms and locker rooms that match their gender identity, not their birth identity. The letter from Education and Justice Department officials told schools to abide by transgender students’ identity, even if their records or identity documents indicate a different sex. The move comes amid the escalating debate over transgender rights that erupted after North Carolina passed a law mandating that only the bathroom matching birth sex can be used by transgender students. “There is no room in our schools for discrimination of any kind, including discrimination against transgender students on the basis of their sex,” Attorney General Loretta Lynch wrote in a statement accompanying the directive. The decree will mean that any schools that go against the order could lose federal funding or face major lawsuits.