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Update: The Trump administration on Wednesday rescinded the memo freezing federal grant programs. Read more.
A Trump administration order freezing all federal grants is fueling widespread confusion among schools, nonprofits, and state governments even as the White House scrambles to clarify that the freeze shouldn’t affect key programs such as Head Start preschool and Title I funding for high poverty schools.
A federal judge temporarily blocked the order from going into effect Tuesday evening amid multiple legal challenges, including a lawsuit filed by a coalition of Democratic attorneys general.
“There is no question this policy is reckless, dangerous, illegal, and unconstitutional,” New York Attorney General Letitia James said at a press conference announcing the states’ lawsuit.
She described funding freezes impacting Head Start in Michigan, child development block grants in Maryland, and Medicaid reimbursement systems in 20 states including New York — even though the Trump administration clarified later in the day that none of those systems should be affected by the pause. “When Congress dedicates funding for a program, the president cannot pull that funding on a whim,” James said.
The stated purpose of the freeze is to find grants that could run counter to Trump administration priorities of ending diversity, equity, and inclusion programs, as well as those that recognize the existence of transgender people and offer them support. Until just a few weeks ago, many federal grants required recipients to incorporate equity measures.
Experts said the order is illegal and violates federal laws that describe how and when a president can block spending authorized by Congress. Federal officials say the pause is temporary and doesn’t trigger requirements to notify Congress or get approval.
Tuesday’s developments were the latest example of President Donald Trump following through on his campaign pledge to use executive authority to dramatically remake the federal government. Many of the executive orders issued from the White House in the past week have generated confusion and fear about their impact, as well as legal pushback.
A memo signed Monday by the acting director of the Office of Management and Budget orders a temporary pause on all grants, loans, and federal assistance, other than spending that goes to individuals, such as Social Security checks. The pause is necessary, Matthew Vaeth wrote, to ensure that money does not go to programs that aren’t aligned with the priorities and values of President Donald Trump.
“The use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve,” the memo states.
Education organizations, Democratic leaders, and others condemned the move.
“Virtually any organization, school, state, police office, county, town or community depends on federal grant money to run its day-to-day operations, and are all now in danger,” Senate Minority Leader Chuck Schumer said at a press conference Tuesday. “The blast radius of this terrible decision is virtually limitless.”
Education, child care leaders criticize Trump funding freeze
Federal grants fund everything from charter school start-up costs to teacher training to emergency response. The school superintendents association said in a blog post that the school lunch program, which depends on ongoing payments, could be affected.
On Tuesday morning, it was unclear whether the pause could hit major programs like Head Start or IDEA, which funds special education. The only exception carved out in the original memo was for payments to individuals, such as Social Security checks. A education department spokesperson said the allowance for individual payments included financial aid for college students, such as Pell grants, but did not elaborate further on the potential impact.
By Tuesday afternoon, additional guidance from the Office of Management and Budget said the freeze on federal funds was never intended to be an “across-the-board” freeze and that pauses on funding could be as brief as a day. The pause does not affect Head Start and SNAP, the memo said. An Education Department spokesperson said grant programs will be reviewed by leadership “for alignment with Trump Administration priorities,” adding that the temporary pause won’t impact Title I, IDEA, and other programs.
The pause on targeted programs was supposed to go into effect at 5 p.m. Tuesday. The memo calls for agencies to submit detailed information about affected programs to the Office of Management and Budget by Feb. 10. The memo also describes a new oversight process in which political appointees will have more control over grant spending.
Those changes aim to ensure money doesn’t go to programs that are found to violate other executive orders. It’s not clear how broadly those mandates might be interpreted or whether they will withstand separate legal challenges.
Rick Hess, director of education policy studies at the conservative American Enterprise Institute, said the Trump administration likely believes the pause is necessary because former President Joe Biden used executive orders to attach additional requirements to many spending programs, such as requiring equity plans and prioritizing communities based on race or gender.
“If one administration is going to use executive authority to condition distribution of funds on politically fraught criteria, we’re seeing this administration say we want to figure out how to strip some of that out,” he said.
How big of a deal the freeze actually is will depend on how long it lasts, how many programs are affected, and what changes the administration requires to resume funding, he said. Until that is known, “the furor and the panic seems to be a bit overwrought.”
But to Rachel Perera, a fellow at the Brown Center on Education Policy at the Brookings Institution, the order violates federal law that dictates when and how a president can decide not to spend money.
“It’s a brazen power grab,” she said. “There is no possible justification because the president doesn’t have the authority to impound funds authorized by Congress.”
Perera said the order amounts to impoundment, a legal process that requires notification to Congress, which hasn’t happened in this case. Congress passed the Impoundment Control Act in 1974 to address overreaches by the Nixon administration that were eventually found to be unconstitutional.
The National Head Start Association said child care providers, who already operate on tight budgets, could not draw down funds Tuesday morning.
“It’s been a scary day,” said Nora Moran, the policy and advocacy director for United Neighborhood Houses, an organization that represents social service providers running afterschool and child care programs in New York City.
Moran said she fielded panicked calls and emails all day from multiple operators of federally funded Head Start child care programs who said they couldn’t access their payment portals, though one later said the portal was open. Roughly 19,000 students across the city attend Head Start programs, according to a December report from the city comptroller. Another $500 million in federal child care block grant money is slated to help fund some 80,000 extended day childcare seats this fiscal year, according to the report.
“Everybody’s now doing calculations about … what this means for their cash flow,” Moran said. Depending on when they were last paid and what other sources of funding are coming in, a two week pause in payments could “absolutely” be enough to shutter a program, she added.
Even if funding is restored quickly, she said, “everyone is just going to be questioning, every day, is this the day this program is turned off.”
William Browning, president and CEO of Denver’s Clayton Early Learning, said he’s not panicking even though he receives $10 million from Head Start, 45% of his annual budget. The Colorado Department of Early Childhood said that the Head Start payment management portal was shut down and no one could pull money until early afternoon. But Clayton recently drew down his monthly allocation and has enough money to continue programming for about two months.
Before he learned that Head Start funding would continue uninterrupted, Browning said he wasn’t worried about additional requirements.
“We’ll happily comply,” he said, “because we … feel like we’re a good steward of the resources.”
SchoolHouse Connections, which helps schools support homeless students, said funding for homeless students under the McKinney-Vento Act likely is not affected, but many programs that serve homeless youth and vulnerable families expected to lose funding. In addition to funds that go to schools, many nonprofit service agencies that support children outside of school rely on federal funding.
State education departments said they are working to understand the potential impacts.
“We are aware of the OMB memo and are communicating with the federal government to gather further guidance,” said Brian Blackley, a spokesman for Tennessee Department of Education. “The Lee administration is committed to serving Tennesseans and working with federal agencies to ensure essential services continue.”
Republican Gov. Bill Lee has welcomed the Trump administration’s approach to education issues in hopes there would be fewer strings attached to federal funding.
Wisconsin State Superintendent Jill Underly, a Democrat, had stronger words.
“Federal grants and funding are essential to giving Wisconsin students the support they need to succeed,” she said in a written statement. “For too long, our public schools have been underfunded by the state, and many rely on federal resources to fill the gap — funding critical areas like special education, school nutrition, programs that support our most underserved learners, technology, and more.”
Chalkbeat journalists Ann Schimke, Michael Elsen-Rooney, Marta Aldrich, Kalyn Belsha, and Samantha Smylie contributed reporting.
Erica Meltzer is Chalkbeat’s national editor based in Colorado. Contact Erica at emeltzer@chalkbeat.org.
