Yesterday, the federal Office of Management and Budget (OMB) released a memo directing all federal agencies to freeze certain federal grant and loan payments, including many that support students and their families.

The freeze is set to take effect at 5:00 PM Eastern Time today. Over the coming weeks, federal offices have been ordered to review spending for alignment with the Trump Administration’s recent executive actions. According to the OMB memo, “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.”

Legal experts and Congressional leaders have raised concerns that this action exceeds presidential authority. A court challenge—and a potential injunction—are expected soon. In the meantime, here’s what school leaders need to know about the potential impact.

Potential Impacts on Students and Families

Earlier today, Madison Biedermann, Deputy Assistant Secretary for Communications and Outreach at the U.S. Department of Education, issued a statement clarifying that the freeze applies only to discretionary grants at the Department of Education. Formula-based programs such as Title I and IDEA are not impacted at this time.

The Department is working with OMB to identify any additional exclusions. However, many vital programs are likely to be affected, including:

• AmeriCorps
• Child care centers
• Food and nutrition assistance to schools (e.g., National School Lunch Program)
• Impact Aid
• Institutional grants
• Research programs
• Training grants

Notably, the original OMB memo listed Head Start among programs subject to review. However, a follow-up Q&A document indicated that Head Start funding will not be paused. These conflicting statements highlight the confusion surrounding implementation and timelines.

Is the Funding Freeze Legal?

The OMB memo includes a legal caveat: “to the extent permissible under applicable law.” Under the current continuing resolution that funds the government through March 14, Congress has already appropriated these funds.

Critics argue that this freeze could violate the Impoundment Control Act, which restricts the executive branch from withholding funds already appropriated by Congress. The Administration claims that “pausing” funds does not amount to impoundment—a position likely to be tested in court.

Senate Appropriations Ranking Member Patty Murray (D-WA) issued a fact sheet outlining legal concerns. Her House counterpart, Rosa DeLauro (D-CT), also released a one and joined Senator Murray in sending a letter to the Acting OMB Director condemning the move:

“With extreme alarm, the Administration’s efforts to undermine Congress’s power of the purse, threaten our national security, and deny resources for states, localities, American families, and businesses.”

California Responds

California Attorney General Rob Bonta issued a strong statement following the OMB memo:

“Make no mistake—any pause to critical funding would hurt families and threaten public health and safety. We’re prepared to protect California’s people and programs from POTUS’ reckless and dangerous actions.”

All federal agencies must submit their program assessments to OMB by February 10. At this point, there is no clarity on when the freeze will be lifted or what permanent changes may be made.

This situation is evolving rapidly. We will provide updates as legal challenges proceed and additional guidance becomes available.