UPDATE: Jan. 28, 2025: A U.S. District judge halted the government's temporary freeze on federal funding just minutes before it was set to take effect at 5 p.m. Tuesday, according to news reports. U.S. District Judge Loren AliKhan in Washington, D.C., blocked the Trump administration's directive for one week.
The challenge came from a coalition of organizations that filed a motion for a temporary restraining order on Tuesday. The plaintiffs, represented in the legal challenge by Democracy Forward, include the National Council of Nonprofits, the American Public Health Association, Main Street Alliance, and SAGE.
In a LinkedIn post announcing the administrative stay, Democracy Forward said, "This is a sigh of relief for millions of people who have been in limbo over the last twenty-four hours as the result of the Trump Administration’s callous attempt to wholesale shutter federal assistance and grant programs that people across this country rely on.
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A federal memo issued Monday directing agencies including the U.S. Department of Education to temporarily pause financial assistance by 5 p.m. Tuesday had education officials scrambling to understand the impacts for K-12.
The memo from the Office of Management and Budget called for federal agencies to conduct a comprehensive analysis of their federal financial assistance programs to see how they may be impacted by President Donald Trump's executive orders regarding diversity, equity and inclusion, nongovernment organizations, "woke gender ideology" and other activities.
The agencies have until Feb. 10 to share their analysis of any affected programs with OMB. The directive said OMB may give exceptions for issuing grants and that agencies can continue certain administrative actions, such as the closeout of federal awards.
Madi Biedermann, spokesperson for the U.S. Department of Education, said in an emailed statement Tuesday, "The funding pause directed by the January 27, 2025, OMB memorandum only applies to discretionary grants at the Department of Education. These will be reviewed by Department leadership for alignment with Trump Administration priorities."
Biedermann added that the temporary pause does not impact Title I, Individuals with Disabilities Education Act or other formula grants. It also doesn't include federal Pell Grants and direct loans under Title IV of the Higher Education Act.
"The Department is working with OMB to identify other programs that are not covered by the memo,” the statement said
The two-page memo, however, leaves a lot of questions and has raised anxiety about fiscal stability in education, policy experts said. Although the Education Department's annual funding appropriations for K-12 account for less than 10% of all K-12 funding, many are wondering how the freeze would impact federal funding streams that support a variety of educational activities.
Julia Martin, director of policy and government affairs for The Bruman Group, a legal and consultative group based in Washington, D.C., said that because formula programs like Title I are also part of the discretionary, rather than mandatory, funding category, it is still not clear what is covered and what is not.
While those programs have already received allocations for this fiscal year, drawdowns of that money could be ongoing. But the question is whether OMB's intentions are to halt both issuance of new awards and disbursement or drawdowns of federal funds under all open awards, Martin said.
Caution is the best approach for grantees until there is more definitive guidance from the Education Department, Martin said.
As the education field waits for more details, Martin suggests some actions local education administrators can do now to prepare. The first is to have a plan for operations if planned drawdowns are put on hold. The second is to share the scope and scale of any impacts of the directive with state officials.
"I think it is important to prepare for that more restrictive possibility that after 5 p.m. Eastern, a lot of those funds will be on hold," Martin said.
AASA, The School Superintendents Association, said its interpretation of the memo is that formula funding for fiscal year 2024 — money being used this school year — cannot be withheld under this directive, according to a posting on the organization's website.
However, AASA added: "Yesterday’s announcement includes a lot of information without a lot of specifics and is certain to face both Congressional and court challenge. Given the very unique approach of the proposal, we can’t, with the information the president has released, have any certainty on what it will mean for FY25."
Organizations seek more details
Education-related advocacy organizations were also trying to determine what the directive means for grants and loans for their causes.
National Head Start Executive Director Yasmina Vinci called the memo "deeply unsettling" in a statement Tuesday morning. Head Start is a federally-funded early childhood education program for low-income families.
"While we understand that this is an evolving story, this disruption, at best, will slow down Head Start agencies’ ability to pay hundreds of thousands of staff, contractors, and small businesses who support Head Start operations in every corner of the country," Vinci said. "At worst, this means that hundreds of thousands of families will not be able to depend on the critical services and likely will not be able to work."
An update Tuesday afternoon from NHSA said that after getting clarification from OMB, Head Start agencies are not included in the list of federal grants and loans whose funds are frozen.
Child Care Aware of America, a nonprofit that supports child care programs and professionals, said it was "deeply alarmed" by the move. " In the absence of any clear analysis of the potential impact of such a pause, or guidance on what is to be included and how the pause is to be implemented, services like child care that make America, its people and our economy stronger may be disrupted," said CEO Susan Gale Perry, in a statement.
Julie Bost, president of the Council for Exceptional Children, said in a statement that the nonprofit special education professional organization is "very concerned about any actions that disrupt the education of infants, toddlers, children and youth with disabilities.”
“The effects of the funding freeze could negatively impact students, teachers, and schools,” Bost added.
Senator Patty Murray, D-Wash., vice chair of the Senate Appropriations Committee, called the actions "a brazen and illegal move" during a Senate press conference Tuesday. She also said the memo is causing chaos nationwide.
"Entire budgets and payrolls across the country are carefully hinging on these resources — we’re talking about small towns, cities, rural America, school districts, universities and much more," Murray said, according to a statement.
A fact sheet released last week by Senate Democrats in response to Trump's executive orders said, "Presidents cannot unilaterally withhold or block investments that have been enacted into law." The OMB memo said the funding pause would be carried out "to the extent permissible under applicable law."
A separate Q&A issued Tuesday by OMB said, "Any payment required by law to be paid will be paid without interruption or delay."
Some Democratic attorneys general indicated Tuesday afternoon that they plan to sue the administration to block the pause from taking effect, according to media reports.
While some lawmakers and organizations voiced concerns about the directives, supporters praised them as efforts to reduce federal bureaucracy and waste.
According to a December report from Parents Defending Education, a national grassroots organization seeking to eliminate what it said is "indoctrination" in schools, the Education Department has awarded about $1 billion in grants since 2021 to DEI-related hiring, programming, and mental health and social-emotional supports.
Another report from the organization found that the U.S. Department of Justice spent $100 million on restorative justice, DEI and social-emotional learning in classrooms from 2021 through 2024.
In a statement issued last week in reaction to Trump's executive orders on ending DEI programs and "gender ideology extremism," Parents Defending Education said, "These changes signal a restoration of merit-based and academically-focused schools, but the conversation and fight for ideologically free classrooms is far from over.”
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