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Memo calling for review, analysis, pause, and oversight of federal financial assistance rescinded, but questions remain

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Updates as of Jan. 30 at 7:00 a.m. — As more information becomes available, EdNC will continue to update this article.

On Jan. 29, The White House Office of Management and Budget rescinded the memo ordering a pause on federal funding, but the press secretary for the White House said on Twitter, now X:

EdNC is in touch with the press department at the U.S. Department of Education. Madi Biedermann, deputy assistant secretary for communications and outreach, confirmed the following, which was sent to state superintendents on Jan. 29: “The funding pause directed by the January 27, 2025, OMB memorandum only applies to discretionary grants at the Department of Education. These will be reviewed by Department leadership for alignment with Trump Administration priorities. The temporary pause does not impact Title I, IDEA, or other formula grants, nor does it apply to Federal Pell Grants and Direct Loans under Title IV, HEA. The Department is working with OMB to identify other programs that are not covered by the memo.

N.C. Attorney General Jeff Jackson joined a lawsuit with 22 attorneys general asking the federal court for an immediate temporary restraining order to prevent the freeze from going into effect. Here is a copy of the complaint.

Updates as of Jan. 29 at 7:00 a.m.

As the memo was distributed to federal agencies, it was accompanied by a spreadsheet with about 2,600 programs under review. The New York Times published the full list on Tuesday. Search for Department of Education to see the list by department.

The U.S. Department of Education said in a statement to the New York Times on Tuesday morning that the government memo calling for a temporary pause on federal grants and loans does not apply to federal student loans or Pell grants.

A federal judge on Tuesday evening issued an administrative stay on the pause. Here is the complaint.


An independent journalist broke the news on Monday that Matthew Vaeth, the acting director of the Office of Management and Budget in the Executive Office of the President, issued a memo to executive departments and agencies calling for a “temporary pause of other grants, loans, and other financial assistance.” The news was quickly confirmed by major news outlets around the country and the world.

The memo calls for four things: (1) a comprehensive review of programs, projects, and activities receiving federal assistance, (2) an analysis of whether they are consistent with President Donald Trump’s priorities, (3) a temporary pause on federal financial assistance while the review is conducted, and then (4) ongoing oversight by a senior political appointee, including the possible cancellation of grants already awarded.

The temporary pause takes effect at 5 p.m. on Jan. 28, and the review must be completed by Feb. 10.

“The American people,” the memo says, “elected Donald J. Trump to be President of the United States and gave him a mandate to increase the impact of every federal taxpayer dollar… Career and political appointees in the Executive Branch have a duty to align Federal spending and action with the will of the American people as expressed through Presidential priorities.”

“Financial assistance should be dedicated to advancing Administration priorities, focusing taxpayer dollars to advance a stronger and safer America, eliminating the financial burden of inflation for citizens, unleashing American energy and manufacturing, ending ‘wokeness’ and the weaponization of government, promoting efficiency in government, and Making America Healthy Again. 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.”

Jan. 28 OMB memo

The memo requires federal departments and agencies to identify and review all federal financial assistance for programs, projects, and activities, and conduct an analysis of whether they are consistent with the President’s presidential actions since he took office.

A definition of federal financial assistance is included in a footnote of the memo, which clarifies that the pause does not apply to federal funds provided directly to individuals. Another footnote says the memo will not impact Medicare and Social Security benefits.

While the review and analysis is conducted, “to the extent permissible under applicable law,” the granting of new awards and disbursement of open awards of federal financial assistance is temporarily paused. The memo specifically names funding for “foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”

On a case-by-case basis, federal agencies may request exceptions from OMB to issue new awards or take other action.

The memo requires future responsibility and oversight for federal financial assistance to be assigned to senior political appointees to ensure spending conforms to the administration’s priorities.

Also to the extent permissible by law, it requires the cancellation of “awards already awarded” if they are in conflict with administration priorities. It references “adequate oversight” of federal assistance programs and says investigations may be initiated “when warranted to identify underperforming recipients.”

After the memo was reported, Democratic U.S. Sen. Chuck Schumer said on Facebook: “Congress approved these investments and they are not optional, they are the law. These grants help communities in red states and blue states and support families, help parents raise kids, and lead to stronger communities.”

In a second post, Schumer said, “Donald Trump’s administration is jeopardizing billions upon billions of community grants and financial support that help millions of people across the country. It will mean missed payrolls and rent payments and everything in between: chaos for everything from universities to non-profit charities, state disaster assistance, local law enforcement, aid to the elderly, and food for those in need.”

Read the two-page memo.

This article will be updated if any additional information is provided by the U.S. Department of Education. Here you can see the scope of federal funding, which the webpage notes is provided to “change the lives of students and help support educators, schools, and districts.”

Mebane Rash

Mebane Rash is the CEO and editor-in-chief of EducationNC.