Is FAFSA paused? What we know about federal loan freeze | FOX 7 Austin

Is FAFSA paused? What we know about federal loan freeze

President Donald Trump issued a directive on Monday to temporarily suspend all federal grants and loans, a move that could impact trillions of dollars in government funding and disrupt vital public programs relied upon by millions of Americans.

The suspension was to begin on January 28 at 5 p.m. EST, but U.S. District Judge Loren L. AliKhan blocked the action Tuesday afternoon, minutes before it was set to go into effect. His administrative stay pauses the freeze until Monday.

Pause on federal grants and loans

What we know:

The initial memo, written by Matthew J. Vaeth, the acting director of the Office of Management and Budget, said federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance including, but not limited to, "financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology and the Green New Deal." 

RELATED: Medicaid access paused by federal funding freeze, states say

Administration officials said the decision was necessary to ensure that all funding complies with Trump's executive orders.

What they're saying:

"This temporary pause will provide the Administration time to review agency programs and determine the best uses of the funding for those programs consistent with the law and the President's priorities," Vaeth continued. 

He also said using federal resources to advance "Marxist equity, transgenderism, and Green New Deal social engineering policies is a waste of taxpayer dollars" and "does not improve the day-to-day lives of those we serve."

(File: Richard Stephen / iStock / Getty Images Plus)

During a White House press briefing, press secretary Karoline Leavitt addressed the pause. 

"It means no more funding for illegal DEI programs. It means no more funding for the Green New Deal scam that has cost American taxpayers tens of billions of dollars. It means no more funding for transgenderism and wokeness across our federal bureaucracy and agencies. No more funding for Green New Deal social engineering policies," she said.

Is FAFSA paused?

What we know:

According to the memo, FAFSA and other student loans will not be directly affected by the directive, as the memo specifies that the pause does not affect "assistance provided directly to individuals."

This means federal assistance to individuals will not be affected, including Social Security, Medicare, food stamps, food stamps, welfare benefits, student loans and scholarships.

What they're saying:

"If you are receiving individual assistance from the federal government, you will still continue to receive that," Leavitt said. "However, it is the responsibility of this president and this administration to be good stewards of taxpayer dollars." 

What we don't know:

The sweeping scope of the federal funding freeze has raised concerns about possible disruptions to educational funding, with education programs potentially being impacted. 

It's not clear what will happen if and when the judge's temporary stay is lifted next week.

What is FAFSA?

According to FederalStudentAid.gov, The Free Application for Federal Student Aid (FAFSA) is a form that students can use to apply for financial aid for college, career school, or graduate school. FAFSA is free to complete and submit.

What will be impacted?

What we know:

The suspension specifically targets financial assistance related to financial assistance for foreign aid, nongovernmental organizations, diversity and equity and the Green New Deal. 

What we don't know:

Due to the memo’s broad nature, it’s still unclear exactly what will be directly impacted, but educational programs, health care research and disaster assistance could potentially be affected.

Washington is a hub of spending that flows to various departments, local governments, nonprofits and contractors, and the memo has left countless people who are dependent on that money wondering how they will be affected.

Why you should care:

The new directive has the potential to impact billions in funding allocated to state and local governments. Federal funds support a wide range of initiatives, from research projects to education grants to housing assistance.

Even grants that have been awarded but not spent are supposed to be halted.

Democrats call pause ‘unconstitutional’ and ‘illegal’

What they're saying:

U.S. Senator Ron Wyden and other state officials claimed on Tuesday that Medicaid portals were down in the U.S., following Trump’s pause on federal funding.

"My staff has confirmed reports that Medicaid portals are down in all 50 states following last night's federal funding freeze," the senator from Oregon said on the social media platform X on Tuesday. "This is a blatant attempt to rip away health insurance from millions of Americans overnight and will get people killed."

Court battles are imminent, and Democratic New York Attorney General Letitia James said she planned to ask a Manhattan federal court to block the Republican president's moves.

"My office will be taking imminent legal action against this administration’s unconstitutional pause on federal funding," she said on social media.

Senate Minority Leader Chuck Schumer, a Democrat from New York, called it "more lawlessness and chaos in America."

"The scope of this illegal action is unprecedented and could have devastating consequences across the country," said Sen. Patty Murray of Washington, the top Democrat on the Senate Appropriations Committee. "For real people, we could see a screeching halt to resources for child care, cancer research, housing, police officers, opioid addiction treatment, rebuilding roads and bridges, and even disaster relief efforts."

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