On Monday, the Office of Management and Budget issued a memo instructing federal agencies to "temporarily pause all activities related to the obligation or disbursement of federal financial assistance." This announcement has raised concerns among financial aid administrators, particularly those managing spring disbursements of federal student loans and grants, about the potential impact on students relying on this support.
January 29, 2025 Update:
The Office of Management and Budget (OMB) has rescinded the memo which would have paused federal funding. Before OMB rescinded the memo, a federal judge had blocked the temporary pause. However, the Trump administration has indicated that rescinding the memo does not mean that there will not be a federal funding freeze. The Attorneys General for 22 states have indicated that they will be in court to fight any freeze.
As of the publishing of this update, there is still a Q&A Fact Sheet published on WhiteHouse.gov.
The U.S. Department of Education Confirms Title IV Aid is Exempt
Many school officials expressed concerns about securing sufficient funds for students relying on financial aid for the Spring semester. Fortunately, the U.S. Department of Education has confirmed that Title IV federal student aid will remain unaffected by this pause. In addition to anticipating an upcoming Electronic Announcement, an alert has already been published on StudentAid.gov to provide further clarity.
Title IV of the Higher Education Act (HEA) governs federal student aid programs, including Direct Loans and Federal Pell Grants. These Title IV programs will continue without interruption, allowing schools to proceed with disbursements as planned.
However, other federal aid programs outside the scope of Title IV may face potential impacts, though the extent of these effects remains uncertain at this time.
Should I Be Concerned About my Financial Aid?
There is no need to worry about your financial aid in relation to this memo.
However, if there are other matters—such as completing student aid verification or finishing entrance counseling—you may have some additional steps to address. It’s recommended to reach out to your financial aid office to resolve any outstanding requirements.