Freeze on federal aid won’t include student loans, Pell grants

On Monday, the White House’s Office of Management and Budget issued a complete freeze on all federal aid. The freeze would have gone into effect on Tuesday at 5 pm; however, a federal judge stayed the order until February 3.

Judge Loren AliKhan of the U.S. District Court for Washington, DC issued the stay in response to a lawsuit led by the National Council of Nonprofits that argued the freeze violated the Administrative Procedure Act. More specifically, they argued that the order is arbitrary and capricious, is contrary to the First Amendment, and is in excess of statutory authority. AliKhan will decide on Monday to grant a preliminary injunction that would prevent the OMB from implementing the funding freeze.

Federal agencies were ordered to suspend all financial aid except for Medicare and Social Security and payments to individuals. The White House clarified Tuesday afternoon that Medicaid, food stamps, small business assistance, Head Start, and rental assistance were also excluded from the freeze. However, Medicaid portals across all 50 states went down on Tuesday, though the White House press secretary stated that the administration was aware of the problem and was working to resolve the outage.

The Department of Education stated on Tuesday morning that the freeze would not apply to federal student loans, Pell grants, or funding for the federal work-study program.

According to the memo: “Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.” The memo does not state when the freeze would be lifted.

There is also concern over how the order could affect research grants from federal agencies such as the National Science Foundation or the National Institutes of Health. The NSF has cancelled all grant review panels until February 1 and the NIH indefinitely suspended all grant review panels on Thursday. Both agencies provide billions of dollars in research funding to universities every year.

On Tuesday, RPI sent an email to faculty to continue as-is until further notice. “The situation is fluid, but for now our guidance is to continue unabated with the work on your existing grants, and on proposals,” the email stated.