Trump’s Funding Freeze Halted. What Financial Aid and Student Loan Recipients Should Know

If you depend on federal student loans, Pell grants or another type of federal financial aid to pay for your tuition, you might be worried about the federal funding freeze that was announced and then temporarily halted on Tuesday.

Just before the Trump-Vance administration’s federal funding freeze was set to go live, it was blocked by US District Judge Loren AliKhan. The federal court order prevents the White House from pausing funds that were already scheduled to be disbursed but allows the administration to freeze new funding. 

A hearing to review the case has been scheduled for Monday at 11 a.m. ET. The court order will last until Feb. 3 at 5 p.m. ET.

What does this mean for student loan borrowers? If the court rules that the White House can freeze all federal funding, it’s not expected to impact federal aid that’s provided to individuals. The Federal Student Aid office issued a statement that said the funding freeze shouldn’t impact Title IV funds, such as federal student loans or Pell grants.

That doesn’t mean that all student financial funding is safe. “It is unclear how this may impact aid from other programs that are not under Title IV,” said Elaine Rubin, a student loan policy expert and CNET Money expert review board member.

For example, federal work-study programs and the Federal Supplemental Education Opportunity Grant could be impacted since these funds are sent to colleges to provide aid for students, said Mark Kantrowitz, a financial aid expert and CNET Money expert review board member. However, most of these funds would have already been allocated for the spring term, so it’s possible these programs won’t be unaffected by the freeze.

Experts say students shouldn’t worry about their financial aid for the current semester.

“Students should expect their federal student aid to be available for their spring term,” Rubin said. “College financial aid administrators remain actively engaged in monitoring policy changes and diligently evaluating their potential impact on those they serve.”