The Trump administration left heads spinning across higher education and elsewhere after ordering a temporary pause on all federal financial assistance, including billions of dollars in grants and loans to colleges.
Late Tuesday, a federal court blocked the directive until Monday, February 3. The court injunction came in response to a lawsuit filed by nonprofit groups and a small-business organization.
The goal of Trump’s funding pause, according to a memo from the White House’s Office of Management and Budget, is to “provide the administration time to review agency programs and determine the best uses of the funding for those programs,” and consider whether such programs align with Trump’s policy agenda.
Before the court injunction, the pause was slated to last until at least February 10. Per OMB’s memo, it’s aimed at rooting out diversity, equity, and inclusion efforts, among other progressive policies.
Higher-education advocates condemned the administration’s move. “This is horrible, horrible public policy,” said Ted Mitchell, president of the American Council on Education, during a discussion with 3,000 of ACE’s members. “Procedurally, it’s also horrible, horrible public policy. It’s institutional destruction.”
A Day of Confusion
On Tuesday, there was initially widespread confusion regarding whether the funding pause applied to federal financial aid. Such a disruption could imperil much of higher education, particularly colleges with a large share of students who receive Pell Grants. Tuesday afternoon, the Education Department confirmed that Title IV student financial aid was not included in the pause.
A department spokesperson told The Chronicle that the “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.”
The spokesperson added: “The department is working with OMB to identify other programs that are not covered by the memo.”
Impounding money like this raises some significant legal questions.
Among the discretionary grants funded by the Education Department are programs that distribute millions of dollars to historically Black colleges. Asked again for clarification, a department spokesperson said that programs for HBCUs and minority-serving institutions would not be affected.
Other discretionary grants include programs that support students’ basic needs, veteran students, rural students, and foreign-language education.
Some financial-aid sources that are based on student need, like the Federal Work-Study and the Federal Supplemental Educational Opportunity Grants, as well as Department of Agriculture grants and loan programs for rural colleges, remain in question.
“This isn’t just a Department of Education issue,” Charles L. Welch, president of the American Association of State Colleges and Universities, said. “It’s across the entire government.”
During Tuesday’s ACE webinar, which took place before the court injunction, the 3,000 participants spent an hour asking whether specific programs were frozen and, if they were, what it meant for their campus.
“A lot of the agencies are trying to catch up to the policy being directed from the White House,” said Jonathan Fansmith, ACE’s senior vice president for government relations and national engagement.
Sarah Spreitzer, the organization’s vice president and chief of staff for government relations, said that while the White House said programs that directly affect people weren’t paused, all of the targeted research grants, student-support efforts, and other federal programs do affect people every day. “I immediately thought about the Department of Agriculture grants and how universities go out into those communities and provide services to farmers,” Spreitzer said.
Mitchell said colleges should approach the funding pause like the Covid-19 pandemic.
“It reminds me of the early days of Covid, when we were talking about a short interruption,” he said, adding that he hopes this one, unlike Covid, is really just temporary. He also said he knows a long-term pause could cripple smaller colleges. “Unfortunately we can’t appeal to the government for relief funds for government action.”
Major Impacts
In the short term, a federal-funding freeze could have relatively little effect on colleges, said Robert Kelchen, a professor and head of the department of educational leadership and policy studies at the University of Tennessee at Knoxville. But if the pause goes on for more than a few days, the impact could be significant, he said.
Kelchen said he learned of the Trump administration’s directive while teaching his higher-education finance class Monday night.
This isn’t just a Department of Education issue. It’s across the entire government.
“This has not happened before,” Kelchen said. “It’s pretty common to put up a short hold on hiring or on new regulations, and it’s also pretty common to try to issue executive orders, to undo previous executive orders. But impounding money like this raises some significant legal questions.”
The percentage of college budgets that rely on federal funding varies widely, Kelchen added. At private colleges, federal money makes up anywhere from 10 to 20 percent of their budgets; at public colleges, that share is larger. Much of the funding is financial aid, which the Trump administration said was exempt from the review.
Still, depending on its scope, a funding pause “could be setting back research enterprises for years,” Kelchen said.
Before this week’s sweeping move, the federal government had paused grant reviews from both the National Institutes of Health and the National Science Foundation until February 1. Now colleges’ research funding appears to be covered by the broader freeze, which is temporarily blocked by the court injunction.
At the University of Chicago, the provost, Katherine Baicker, instructed the faculty not to purchase new supplies or equipment, or start new experiments or university-funded traveling.
“This is not a request that I make lightly. The research enterprise is at the core of our university’s mission and is of profound importance to the daily work of our faculty, researchers, staff, and students. I also know that this is insufficient guidance and that you must have many questions (as do I),” Baicker wrote in a faculty memo, according to the Chicago-Sun Times.
Pauses, even temporary ones, in scientific research and development can have ramifications, according to one scientist and former university administrator.
“If there is a reduction in employment in a lot of these college towns where the research is being done, that’ll have very big implications for those states and for the people in Congress,” said Holden Thorp, editor in chief of the Science family of journals and a professor of chemistry at George Washington University. “Then there is just a general slowdown in scientific progress when we have so many pressing challenges.”
Ruth Johnston, vice president for consulting at the National Association of College and University Business Officers, spent Tuesday morning consoling and strategizing with higher-education leaders and chief financial officers who were concerned about how to shore up their budgets if a key source of revenue was cut off.
Johnston encouraged college leaders to see how a funding freeze could help higher education.
“With every negative, you got to look for a positive, and that’s what we’re going to have to do,” Johnston said. “It’s a chance to relook at everything that we do and try to become more streamlined, try to be more focused, and to work with our legislatures, work with our state and federal officials, and come together on all of this.”
