White House Freeze on Federal Aid Won’t Impact Student Loans, Education Department Clarifies
The pause on federal funding, which could affect billions of dollars, will not impact student loans or financial aid for college, according to the Education Department.
On Tuesday, the Department of Education confirmed that the White House’s freeze on federal grants and loans will not affect student loans or financial aid for college students. This announcement came after the White House's decision to pause funding in areas not aligned with President Donald Trump’s policy agenda.
The freeze, which could impact billions of dollars in government aid, specifically excluded Social Security and Medicare, as outlined in the White House memo issued on Monday. The memo clarified that the pause "does not include assistance provided directly to individuals," ensuring that student financial aid would remain unaffected.
Matthew J. Vaeth, acting director of the White House Office of Management and Budget, explained that the pause gives the White House time to reassess federal funding for areas deemed inconsistent with Trump’s priorities. The memo identified “financial assistance for foreign aid, non-governmental organizations, DEI, woke gender ideology, and the Green New Deal” as the main targets.
Impact on Student Aid Programs
The Department of Education further clarified that the freeze would not affect major student aid programs, including the Free Application for Federal Student Aid (FAFSA) for the upcoming year. “The temporary pause does not impact Title I, IDEA, or other formula grants, nor does it apply to Federal Pell Grants and Direct Loans under Title IV of the Higher Education Act,” said Madi Biedermann, Education Department spokesperson.
Title IV encompasses federal student aid programs, such as Pell Grants and Direct Loans, while Title I provides funding to school districts serving low-income families. The Individuals with Disabilities Education Act (IDEA) also remains unaffected, as it funds students with disabilities.
According to Biedermann, the pause only applies to discretionary grants within the Department of Education. These grants will be reviewed to ensure alignment with the Trump administration’s priorities.
Possible Effects on Campus-Based Aid Programs
While many federal student aid programs are protected under Title IV, there are concerns about programs like Federal Work-Study and the Federal Supplemental Educational Opportunity Grant (FSEOG), which are provided to colleges for distribution to students. Higher education expert Mark Kantrowitz noted that since many colleges have already used their funds for the spring term, these programs may not be significantly impacted. However, research grants, which sometimes include funding for graduate research assistantships, could see disruptions.
Uncertainty and Confusion Over the Freeze
Despite the clarifications from the Education Department, there remains confusion about which forms of aid will be affected. Karen McCarthy, vice president of public policy at the National Association of Student Financial Aid Administrators, expressed concern that the memo’s language did not fully clarify whether funds sent to institutions, states, or organizations and then distributed to students would be impacted.
While Title IV funds are primarily intended for individual students and are not expected to be impacted, McCarthy highlighted that other aid programs outside of Title IV remain uncertain. “We are also researching the impact on campus-based aid programs since they are funded differently,” McCarthy said.
Jonathan Riskind, vice president at the American Council on Education, voiced concerns about the uncertainty surrounding the freeze, stating that it was damaging for students and institutions. “There are a lot of questions, understandably,” Riskind said, noting that the situation could harm the millions of students relying on federal aid.
Calls for Reversal
Ted Mitchell, president of the American Council on Education, called for the Trump administration to reverse the decision, arguing that it would negatively impact students and research funding. “This is bad public policy, and it will have a direct impact on the funds that support students and research,” Mitchell said. “The longer this goes on, the greater the damage will be.”