On Monday, the White House announced a temporary suspension of federal grants and loans, but this move will not impact student loans or college financial aid, as stated in a memo. The Department of Education has reassured that student-related funding will remain unaffected.
This pause, potentially impacting billions in aid, makes exceptions for Social Security and Medicare, clarifying that “assistance provided directly to individuals” is not included, according to the memo. The intent behind this pause is to allow the White House to assess whether government funds are being allocated to causes aligned with President Donald Trump’s policy agenda, explained Matthew J. Vaeth, the acting director of the White House Office of Management and Budget.
Specific areas mentioned in the memo include financial aid for foreign aid, non-governmental organizations, diversity, equity, affirmative action (DEI), gender ideology, and environmental initiatives like the Green New Deal.
### Impact on Student Aid
The U.S. Department of Education emphasized that this hold on federal aid won’t affect Pell Grants, student loans, or the upcoming Free Application for Federal Student Aid (FAFSA).
Education Department spokesperson Madi Biedermann clarified in a statement that programs providing financial assistance, such as Title I, IDEA, or other formula grants, including Pell Grants and Direct Loans, remain untouched. Title I assists school districts with low-income families, while the Individuals with Disabilities Education Act (IDEA) supports funding for students with disabilities.
“This pause only targets discretionary grants within the Education Department, which will be evaluated by leadership for compatibility with Trump Administration goals,” Biedermann added.
Higher education expert Mark Kantrowitz pointed out that federal work-study programs and the Federal Supplemental Educational Opportunity Grant could be impacted. These grants are distributed to colleges in bulk for student disbursement. However, since many colleges have already received their spring term funds, the impact might be minimal, though it could affect grants for research, often tied to funding for graduate research assistantships.
### Confusion Surrounding the Freeze
Karen McCarthy, vice president of public policy and federal relations at the National Association of Student Financial Aid Administrators, highlighted the confusion caused by the memo. “While it states that the pause excludes assistance ‘provided directly to individuals,’ it’s unclear if this includes funds initially sent to institutions, states, or organizations before reaching students,” she remarked.
Typically, most federal financial aid programs under Title IV are earmarked for individual students and are thus not impacted. However, the situation is less clear for aid outside Title IV. “We’re investigating the effects on campus-based aid programs, as they are financed differently,” McCarthy noted.
### Reaction and Concerns
Jonathan Riskind, a vice president at the American Council on Education, voiced concerns over this uncertainty, emphasizing that it generates considerable confusion for the 20 million students served by these programs. “This level of uncertainty is incredibly disruptive for both students and educational institutions,” he stressed.
Ted Mitchell, president of the American Council on Education, urged the Trump administration to withdraw the directive. “This is poor public policy, which will directly affect financial support for students and research. The longer this persists, the greater the damage,” he warned.
