Trump Admin Temp Pause on Fed Grants & Loans
UPDATE: Minutes before the order was to take effect - U.S. District Court Judge Loren AliKhan blocked the administration's OMB directive through at least Feb. 3, 2025 at 5:00 p.m. ET.
President Trump issued an executive order requiring federal agencies to halt financial assistance programs including grants and loans on January 28, 2025 at 5:00 pm Eastern Time.
Here is a quick look at the implications to some of the more widespread programs accessed by Americans:
Q: Is this a freeze on all Federal financial assistance?
A: No, the pause does not apply across-the-board. It is expressly limited to programs, projects, and activities implicated by the President’s Executive Orders, such as ending DEI, the green new deal, and funding nongovernmental organizations that undermine the national interest.
Q: Is this a freeze on benefits to Americans like SNAP or student loans?
A: No, any program that provides direct benefits to Americans is explicitly excluded from the pause and exempted from this review process. In addition to Social Security and Medicare, already explicitly excluded in the guidance, mandatory programs like Medicaid and SNAP will continue without pause. Funds for small businesses, farmers, Pell grants, Head Start, rental assistance, and other similar programs will not be paused. If agencies are concerned that these programs may implicate the President’s Executive Orders, they should consult OMB to begin to unwind these objectionable policies without a pause in the payments.
Q: Is the pause of federal financial assistance an impoundment?
A: No, it is not an impoundment under the Impoundment Control Act. It is a temporary pause to give agencies time to ensure that financial assistance conforms to the policies set out in the President’s Executive Orders, to the extent permitted by law. Temporary pauses are a necessary part of program implementation that have been ordered by past presidents to ensure that programs are being executed and funds spent in accordance with a new President’s policies and do not constitute impoundments.
Q: Why was this pause necessary?
A: To act as faithful stewards of taxpayer money, new administrations must review federal programs to ensure that they are being executed in accordance with the law and the new President’s policies.
For the full executive order and the follow-up clarifying memo, follow the links below.