- Trump’s administration announced a temporary freeze on federal grants and loans set to begin Tuesday evening.
- The Education Department said student loans and Pell Grants will not be impacted.
- It’s still unclear which federal programs, like rental aid and nutrition assistance, will be impacted.
Some student loan borrowers won’t have to worry about President Donald Trump’s sweeping federal funding freeze.
The Department of Education said in a statement to Business Insider that the funding pause only applies to “discretionary grants” at the agency. The Department did not immediately clarify what is considered a discretionary grant.
“The temporary pause does not impact Title I, IDEA, or other formula grants, nor does it apply to Federal Pell Grants and Direct Loans under Title IV, HEA,” Madi Biedermann, spokesperson for the Department of Education, said in a statement. “The Department is working with OMB to identify other programs that are not covered by the memo.”
Pell Grants are awarded to low-income students who demonstrate financial need, with the maximum award now standing at just over $7,000. Additionally, over 40 million Americans rely on federal student loans to help them finance their higher education, and those loans will continue to be disbursed during the funding freeze.
The Office of Management and Budget’s memo sent to federal agencies Monday night sparked confusion due to its lack of clarity on which programs would be impacted by the funding freeze. The memo appeared to be partly focused on ensuring federal agency spending aligned with Trump’s agenda, saying that paused payments must include “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”
Other federal agencies told BI that they’re reviewing the executive orders, and pausing accordingly. The National Science Foundation, for instance, has said that “all review panels, new awards, and all payments of funds under open awards will be paused as the agency conducts the required reviews and analysis.” An EPA spokesperson said the agency “is temporarily pausing all activities related to the obligation or disbursement of EPA Federal financial assistance at this time.”
Some experts also told Business Insider that programs scheduled to receive funding in a matter of days, including Head Start and Section 8 housing vouchers, are at a higher risk. Democratic Sen. Chris Murphy wrote in a post on X that in his state of Connecticut, “the Head Start reimbursement system IS shut down. Preschools cannot pay staff and will need to start laying off staff very soon and sending little kids home.”
As of Tuesday afternoon, BI reporters had contacted more than 65 federal, state, and nonprofit agencies and universities. Those who responded overwhelmingly said they had no idea how the federal funding freeze would affect their work and were actively trying to figure it out.
The funding pause is set to begin at 5 p.m. ET on Tuesday. A follow-up memo from the OMB said that “any program that provides direct benefits to Americans is explicitly excluded from the pause and exempted from this review process,” which includes student loans, SNAP, Social Security, and Medicare.
Are you a federal worker, or do you receive some form of federal assistance? Contact these reporters at asheffey@businessinsider.com and jkaplan@buinessinsider.com.
Source link
lol
