A Message from the Afterschool Alliance:
On January 27, 2025, the Office of Management and Budget (OMB) issued a memo outlining the temporary pause of federal agencies' grant, loan, and other financial assistance programs. This is expected to impact a wide range of stakeholders, including state and local governments, nonprofit organizations, businesses, and other entities that rely on federal funding. The temporary freeze on federal grants would violate the law. However, a temporary freeze would not.
As of late on January 28, 2025, a federal judge has placed a "brief administrative stay" on the temporary suspension of federal grants halting the temporary freeze until 5pm Monday, February 3, 2025, pending a legal consideration.
In the short term, the funding pause will:
Stop scheduled federal payments to entities (Head Start centers, school nutrition programs, etc.)
Halt work and disbursement of funding for competitive grant programs and ongoing grants already funded.
What this means for education funding -
Most K-12 formula grants already have their FY 2024 Funding - As these programs have their current funding already, it is not at risk. These programs wouldn't get their FY 2025 funding until this July or October. State education agencies should still be able to draw down federal formula funding, as per a new memo from the White House. The temporary pause does not impact Title I, IDEA, or other formula grants.
Other education funding that goes to organizations are affected. Higher education funding that goes to organizations like colleges and universities and for other education programs that are not forward funded, including Impact Aid, AmeriCorps programs, institutional grants, research programs, training grants, funds for Head Start centers, and ongoing food and nutrition assistance that goes not to an individual but to a school or other entity.
According to the OMB Memo, the primary reason for the temporary suspension is to allow for a comprehensive review of existing financial assistance programs across federal agencies. This review aims to ensure the efficacy, compliance, and integrity of these programs in light of ongoing efforts to improve government accountability and financial management. The extent of the impact of the memo remains unclear, and individual federal agencies will be interpreting the memo. Guidance from agencies that manage federal grants is expected soon.
By February 10, agencies are to report all "programs, projects, and activities that may be implicated" and in the meantime, "to the extent permissible under applicable law" stop all obligations or disbursements of federal funds, including new and existing awards and "other relevant agency actions that may be implicated by the executive orders".
For more information regarding this temporary pause, visit the Afterschool Alliance's website.
