The Obama administration on Friday sent a letter to every public school district in the country directing them to allow transgender students to use the bathrooms that match their gender identity.

According to The New York Times, the letter, signed by Justice and Education department officials, does not have the force of law. However, schools that do not comply risk lawsuits or possibly the loss of federal aid.

The Human Rights Campaign (HRC), the nation's largest LGBT rights advocate, applauded the move.

“This is a truly significant moment not only for transgender young people but for all young people, sending a message that every student deserves to be treated fairly and supported by their teachers and schools,” HRC President Chad Griffin said in a statement.

The move comes as the Justice Department is suing the state of North Carolina over a law that prohibits transgender people from using the bathroom of their choice in government buildings, including schools.

(Related: North Carolina Gov. Pat McCrory to defend anti-gay law in court; U.S. sues.)