Federal Grant Freeze Won’t Impact College Student Financial Aid
Credit: Melina Mara-Pool / Getty Images- President Donald Trump is instituting a freeze on many federal grant programs.
- This action does not include grants and other funds that go directly to individuals.
- Student financial aid, therefore, remains unaffected.
- The trickle-down effect of this freeze could impact college students, but the implications are still unknown.
Jan. 29, 1 p.m. EST Update: The Office of Management and Budget rescinded its memo shortly after the federal court issued its stay. White House Press Secretary Karoline Leavitt added that the White House still plans to review federal spending on grant programs.
Jan. 28, 5 p.m. EST Update: A judge for the U.S. District Court for the District of Columbia temporarily paused implementation of President Trump’s freeze on existing federal grant programs on Jan. 28. The judge’s stay expires on Feb. 3, giving the court more time to determine the legality of the executive branch’s action.
A freeze on federal grant spending will not impact federal student loans, Pell Grants, work-study, and other student financial aid.
The Office of Management and Budget (OMB) released a memo Monday announcing President Donald Trump’s freeze, briefly creating confusion across higher education institutions about how the action would impact students. However, the pause won’t directly affect current college students, as it does not impact aid going to individuals.
The Department of Education (ED) told BestColleges the temporary pause does not include federal financial aid programs.
“Per the OMB memo issued yesterday, the temporary pause does not impact ‘assistance received directly by individuals,'” ED spokesperson Madi Biedermann said. “As such, Title IV, [Higher Education Act] funds that are provided to individual students, such as federal Pell Grants and Direct Loans, are not impacted by yesterday’s guidance.”
Still, there remains uncertainty about the larger impact of this freeze on higher education.
Individual students will still receive federal financial aid, but many college and university operations rely on federal grants. This is especially true for minority-serving institutions (MSIs) like historically Black colleges and universities (HBCUs) that states have historically underfunded.
MSIs may soon be left without funds to meet necessary expenses like payroll, one higher education source told BestColleges. These institutions may only draw on federal funds as needed, so they likely don’t have a surplus of funds to draw on over the next two weeks.
Additionally, the pause may require colleges to suspend childcare options for students funded through the Child Care Access Means Parents in Schools (CCAMPIS) program.
OMB’s memo gives federal agencies until Feb. 10 to send a report on programs impacted by the pause.
White House Press Secretary Karoline Leavitt told reporters Tuesday that agencies can contact OMB directly to make the case for necessary spending in grant programs. This could potentially allow colleges and universities to retain access to funds, but the details remain murky.
Trump is using this freeze to analyze what programs are funded through federal dollars, Leavitt added. This will give his administration a chance to cut spending that is not “aligned with the president’s agenda,” she said.
She directly referenced executive orders signed by Trump to eliminate the federal government’s diversity, equity, and inclusion (DEI) policies and spending.
Seemingly all federal grant programs are under consideration. OMB sent an itemized list of all federal grant spending programs that ED will need to analyze. The list includes the Pell Grant program, various TRIO programs, and grants for tribally controlled colleges and universities.
ED will have to state whether these programs “provide funding that is implicated by the directive to end discriminatory programs, including illegal DEI … mandates, policies, programs, preferences, and activities.”
Many advocacy organizations and special interest groups couldn’t determine how the freeze would impact them in the short term. It also remains unclear how this analysis of federal spending might impact higher education programs in the longer term.
The National Council of Nonprofits filed a lawsuit in federal court Tuesday in an effort to block implementation of the grant freeze before it goes into effect. A judge scheduled a hearing one hour before the pause is set to take effect.