President Trump has only been in office for a few weeks, but he’s already made significant changes through executive orders. One of the most significant changes was the announcement that he was pausing federal funding and grants. That measure caused widespread confusion, and many education experts were concerned about the potential impact to financial aid.
The federal funding freeze has been paused in federal court, but college students, high school seniors and their families may still be worried about how these changes could affect their financial aid options. Here’s what you should know:
President Trump’s Federal Funding Pause
On Monday, January 27, 2025, the Trump Administration issued several executive orders. Namely, the administration issued a memorandum that froze federal grants and loan programs.
Under the order, federal agencies were told they “must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance.”
Many non-profit organizations, higher education institutions and government agencies protested the move, saying it caused major hurdles and would affect essential programs. Two days later, the Trump administration rescinded the freeze.
Further, two federal judges ordered temporary pauses on the Trump administration’s federal funding freeze plan. Although the freeze cannot go into effect yet, the Trump administration will likely continue to push for significant changes, and there is the potential for a version of the freeze to move forward.
What the Federal Funding Freeze Means for College Students
When the memorandum was first released, many higher education institutions, financial aid organizations and lobbyist groups said they believed federal financial aid programs would be impacted. However, the impact to financial aid varies by program.
Federal Financial Aid
The Trump administration issued clarification that the freeze didn’t apply to programs that provided direct assistance to Americans, and it the U.S. Department of Education site explicitly stated that federal financial aid programs like Pell Grants and Direct Loans were exempt. The Department of Education would continue to issue financial aid and manage these programs as usual.
State-Based or Campus-Based Aid
The temporary freeze doesn’t affect financial aid that goes directly to students. However, there is still some ambiguity about other types of financial aid, such as state-based or campus-based financial aid programs that receive federal funding.
State- or school-issued grants and other aid programs may be impacted, as well as ancillary support services, like college food banks, childcare for student parents, and more.
What Students Can Do Right Now
Right now, what will happen with the federal funding freeze and financial aid is unclear. If you’re an existing college student or are a high school senior preparing for college in the fall, here is what you should do now to get ready:
- Submit the FAFSA: Although you may have weeks or months left before your state Free Application for Federal Student Aid (FAFSA) deadline, the sooner you fill it out and submit it, the better. Submitting the FAFSA allows you to qualify for federal, state and campus-based aid, and some aid is awarded on a first-come, first-served basis. Applying now rather than waiting can allow you to lock in your aid.
- Accept college aid offers: If you’ve already received college acceptance letters, review them and promptly respond to secure your place and your financial aid package.
- Explore other aid: Many organizations offer scholarships and grants, including organizations that don’t receive any federal funding. Applying for aid from these organizations can help reduce your out of pocket education costs. You can find scholarship and grant opportunities on FastWeb and Scholarships.com.
- Consider private loans: If the rest of your aid isn’t enough to cover the total cost of attendance, private student loans can help cover the gap. With private loans, parents and students can take out loans to pay for undergraduate and graduate degrees, with competitive rates and terms. You can submit your information and prequalify for loans through ELFI online.
- Follow the news: You can view the latest updates regarding the Trump administration’s changes to federal financial aid on the U.S. Department of Education website.
- Contact your school financial aid office: If you have specific questions about your aid package or the impact of the funding freeze on your financial aid, contact your school financial aid office. The representatives will have the latest information on the memorandum and its direct impact, so they can help you figure out if you’re impacted.
