U.S. President Donald Trump rescinded an order to pause all federal grants and loans which caused panic at HBCUs. The 48 hours that the sweeping order was active created a flurry of lawsuits, panic at some non-profits, and uncertainty at colleges and universities — particularly HBCUs.
The freeze was a threat to these organizations that were built to assist the general public in specific areas. The knee-jerk reaction to trillions of dollars to programs that affect a cross-section of the country was absolute chaos. HBCU Gameday spoke with financial aid officers at three HBCUs. Their initial assertion was that if federal financial aid and Pell grants were frozen, it was a literal death certificate for the students.
For HBCUs, 75-percent of the student population receive Pell Grants, while another 15 percent use federally-backed loans to afford college. The memo from the Office of Management and Budget hit inboxes around 5:00PM on Monday and led to a frantic Tuesday as one of the HBCUs we spoke with tried all day to draw down as many resources as it could from the portal, fearing that it would shut permanently or be closed long enough to not be able to support a spring semester.
The confusion over Trump’s order crossed party lines
Fortunately, the confusion even reached across party lines. Some Republicans felt blind-sided by the move, while others towed the normal line and took lines from the memo as their explanation.
A bevy of lawsuits were initially filed, with the first and largest suit being granted a stay by the court. The stay was granted because of the confusion around the order, which seemingly no one could fully explain and the memo was too vague in its description.
While the Trump Administration held to the notion that Social Security, student loans, food stamps, and Medicare, would not be affected, the memo’s vague nature did not outline those programs specifically.
Adding to the whole process was some portals to access the funds temporarily went down. Some programs that assisted with healthcare and homelessness lost access to their portals to draw down funding for a period of time on Tuesday, adding to the threat and confusion.
Trump Administration officials maintain that the reviews will continue under the directive, but will not be as sweeping as the original memo suggested. Special interest groups and unions are on alert to file additional court cases to fight any other attempts to implement the sweeping freeze in the budget office’s initial memo.
Late on Tuesday, guidance to the order was delivered
Late on Tuesday, much too late to squelch the frantic confusion, the White House released a guide which went on to detail the freeze. We present it in its entirety.
In implementing President Trump’s Executive Orders, OMB issued guidance requesting that agencies temporarily pause, to the extent permitted by law, grant, loan or federal financial assistance programs that are implicated by the President’s Executive Orders.
Any program not implicated by the President’s Executive Orders is not subject to the pause.
The Executive Orders listed in the guidance are:
Protecting the American People Against Invasion
Reevaluating and Realigning United States Foreign Aid
Putting America First in International Environmental Agreements
Unleashing American Energy
Ending Radical and Wasteful Government DEI Programs and Preferencing
Defending Women from Gender Ideology Extremism and Restoring Biological Truth tothe Federal Government
Enforcing the Hyde Amendment
Any program that provides direct benefits to individuals is not subject to the pause.
The guidance establishes a process for agencies to work with OMB to determine quickly whether any program is inconsistent with the President’s Executive Orders. A pause could be as short as day. In fact, OMB has worked with agencies and has already approved many programs to continue even before the pause has gone into effect.
Any payment required by law to be paid will be paid without interruption or delay.
Q: Is this a freeze on all Federal financial assistance?
A: No, the pause does not apply across-the-board. It is expressly limited to programs, projects, and activities implicated by the President’s Executive Orders, such as ending DEI, the green new deal, and funding nongovernmental organizations that undermine the national interest.
Q: Is this a freeze on benefits to Americans like SNAP or student loans?
A: No, any program that provides direct benefits to Americans is explicitly excluded from the pause and exempted from this review process. In addition to Social Security and Medicare, already explicitly excluded in the guidance, mandatory programs like Medicaid and SNAP will continue without pause.Funds for small businesses, farmers, Pell grants, Head Start, rental assistance, and other similar programs will not be paused. If agencies are concerned that these programs may implicate the President’s Executive Orders, they should consult OMB to begin to unwind these objectionable policies without a pause in the payments.
Q: Is the pause of federal financial assistance an impoundment?
A: No, it is not an impoundment under the Impoundment Control Act. It is a temporary pause to give agencies time to ensure that financial assistance conforms to the policies set out in the President’s Executive Orders, to the extent permitted by law. Temporary pauses are a necessary part of program implementation that have been ordered by past presidents to ensure that programs are being executed and funds spent in accordance with a new President’s policies and do not constitute impoundments.
Q: Why was this pause necessary?
A: To act as faithful stewards of taxpayer money, new administrations must review federal programs to ensure that they are being executed in accordance with the law and the new President’s policies.
