The last few weeks have been full of breaking federal policy news. With new updates every day, and sometimes every hour, following along can feel like trying to drink from a firehouse. This is particularly true of the aftermath of the Office of Management
and Budget’s (OMB) January 27 memo, announcing plans to freeze trillions of dollars of federal funding. Here’s a quick recap:
In a two-sentence memo on Wednesday, January 29, the White House rescinded the initial OMB guidance calling for the suspension of federal funds. Shortly
afterwards, the White House Press Secretary, Karoline Leavitt, posted on X that while the initial memo had been rescinded, the funding freeze had not.
In the days following the memo, two lawsuits were filed. The first was brought overnight by a group of non-profit organizations in a US District Court in Washington, DC, prior to the White House’s rescission of OMB memo. The other suit
was filed later in the week by 23 attorneys general, in a US District Court in Rhode Island.
In the first case, led by the National Council of Nonprofits and Democracy Now, federal judge Loren AliKhan granted a temporary restraining order (TRO) on
Monday, February 3, halting the OMB directive to suspend federal funding. Judge AliKhan also denied OMB’s request to dismiss the lawsuit filed by the coalition of non-profits. (The lawyers representing OMB had argued that the case was moot, given
that the memo had been rescinded.)
In the order granting the TRO, Judge AliKhan wrote that the evidence submitted by the coalition of nonprofit organizations “paint[s] a stark picture of nationwide panic in the wake of the funding freeze. Organizations with every conceivable mission…were shut out of funding portals or denied critical resources beginning on January 28.”
There will be a hearing on February 20, during which Judge AliKhan will decide whether to issue a preliminary injunction – which is a longer-term pause, issued by the court. A preliminary injunction would prevent the federal funding freeze from taking
effect throughout the course of the litigation.
In the other case, US District Judge John McConnell sided with attorneys general on Friday, January 31, to issue a separate TRO,
blocking the suspension of federal dollars to any of the states party to the lawsuit, and the District of Columbia, until further ordered by the court. There is a hearing scheduled for February 21 regarding a preliminary injunction.
In the interim, on Monday, February 10, Judge McConnell issuedanother order to the Trump Administration to immediately
unfreeze any suspended federal funding, stating that the Administration had failed to comply with the TRO. The order, known as a motion to enforce,
specifically highlighted federal funds appropriated through the Inflation Reduction Act and the Infrastructure Improvement and Jobs Act, as well as those intended for other agencies and institutes.
“The broad categorical and sweeping freeze of federal funds is, as the Court found, likely unconstitutional and has caused and continues to cause irreparable harm to a vast portion of this country,”wrote Judge McConnell.
Most importantly, it is critical that National College Attainment Network (NCAN) members communicate to students and families that the Free Application for Federal Student Aid, or FAFSA, remains functional, and the US Department of Education
(ED) continues to award and disburse financial aid. While the memo has been rescinded, a spokesperson from ED clarified that aid going to individual students, such as Pell Grants and direct student loans, would not be impacted
by a funding freeze.
This is an ongoing story, and NCAN will continue to provide updates.
Questions? Reach out to Louisa Woodhouse, Senior Associate, Policy, at woodhouse@ncan.org, or Catherine Brown, Senior Director, Policy and Advocacy, at brownc@ncan.org.
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