Does Trump administration’s funding pause apply to federal student loans? What to know
UPDATE: The Trump administration on Jan. 29 rescinded the order that would have put a temporary pause on federal funding, NBC News reported.
The original story continues below.
As President Donald Trump’s administration issued a temporary federal funding pause announcement Jan. 27, college students and parents of college students worried about how it could impact student loans — and for many — their ability to attend college.
The memorandum from the Office of Management and Budget states that as of 5 p.m. Tuesday, Jan. 28, federal agencies must pause the disbursement of federal financial assistance to evaluate programs and activities that may not be aligned with Trump’s policies.
However, U.S. District Judge Loren L. AliKhan temporarily blocked the pause on federal grants and loans until Feb. 3, AP News reported.
Those policies include “focusing taxpayer dollars to advance a stronger and safer America, eliminating the financial burden of inflation for citizens, unleashing American energy and manufacturing, ending ‘wokeness’ and the weaponization of government, promoting efficiency in government, and Making America Healthy Again,” according to the memo.
The announcement stated that the freeze “does not include assistance provided directly to individuals,” but it did not specify further, sending some — including education officials — into a panic.
“Because of FAFSA, I was able to afford and achieve my college education. Now the Trump administration just paused FAFSA and all Federal Loans indefinitely for millions of users. The American Dream is officially dead,” one person said on X, formerly known as Twitter.
A Department of Education spokesperson, however, confirmed Jan. 28 in a statement shared with McClatchy News that the temporary freeze does not impact federal Pell grants and direct loans under Title IV, HEA; Title I, IDEA; or other formula grants.
It does, however, apply to the department’s discretionary grants. Those are typically administered to state and local educational agencies, tribes and tribal organizations, higher education institutions and nonprofit organizations, among others, according to the DOE’s website.
Discretionary grants will also be reviewed by DOE leadership, according to the statement to McClatchy News.
The spokesperson said the department is working with the Office of Management and Budget to identify other programs that are not impacted by the memo.
“This is not a blanket pause on federal assistance and grant programs from the Trump administration,” White House Press Secretary Karoline Leavitt said in a Jan. 28 briefing.
According to the memorandum, Medicare and Social Security benefits are also not impacted.
The deadline for federal agencies to submit their assessments on programs and projects subject to the freeze to the Office of Management and Budget is Feb. 10, according to the announcement.
This story was originally published January 28, 2025 at 2:34 PM with the headline "Does Trump administration’s funding pause apply to federal student loans? What to know."
