The Office of Management Budget (OMB) memo ordering an immediate freeze on federal grants and loans has been rescinded, however the freeze itself is still being implemented in “full force and effect.” Possible implications for educational funding have already been noted in some places. 

Alongside Medicaid, many Head Start providers could not access necessary systems temporarily following the OMB memo release. Head Start is a program from the Department of Health and Human Services that provides early education and comprehensive services to children and families in need. In the fiscal year 2024, Kentucky received over $213 million dollars in funding for Head Start programs.

The Department of Education clarified on Tuesday that Pell grants and student loans would not be affected by the ordered federal grant or loan freezes, given that they are “received directly” by individuals. 

The Kentucky Higher Education Assistance Authority (KHEAA) has confirmed that the state grant and scholarships the organization provides will not be impacted by the freeze. 

Additionally, organizations and universities have voiced concerns about funding for higher education and research grants. At the University of Chicago, Provost Katherine Baicker sent an email to faculty requesting they “temporarily suspend their non-personnel spending on federal grants” as a result of the now rescinded OMB memo freezing federal grants. 

“We are extremely concerned about the impact of this action on our country’s ability to maintain its scientific and technological lead against competitors and potential adversaries,” said American Association of Universities President Barbara Snyder in a statement. 

The President of the American Council for Better Education, which represents over 1,600 colleges, called on President Trump to rescind the memo, stating it was “bad public policy”.

On Wednesday, Jan. 29, the Office of Management and Budget (OMB) rescinded a memo directing agencies to freeze trillions of dollars in federal grants and loans. This order was temporarily blocked by a federal judge on Tuesday, before it could go into effect by 5 p.m. that day. 

The order had undergone public scrutiny before it was rescinded, given its vagueness regarding what funding was to be freezed. Updated guidelines sent out by OMB on Tuesday stated that Social Security, Medicare, Medicaid, SNAP and other programs that “provide direct benefits to Americans” would not be included in the freeze. 

“It is expressly limited to programs, projects, and activities implicated by the President’s Executive Orders, such as ending DEI, the green new deal, and funding nongovernmental organizations that undermine the national interest,” stated a White House facts sheet released on Tuesday addressed concerns that the freeze would apply to all federal grants and loans.

While the memo itself has been rescinded, the White House has said that the federal freeze itself is still in “full force and effect,” giving agencies more time to review and assess their relevant programs to comply with the freeze. 

White House Press Secretary Karoline Leavitt said in a Wednesday tweet that the memo was rescinded “…to end any confusion created by the court’s injunction.” 

The rescission of this order is the first major reversal in the Trump administration thus far, given that President Trump has issued dozens of sweeping executive orders since his inauguration. His orders have addressed immigration, healthcare, gender and more.