When news broke that the Trump administration had issued a broad freeze on federal grants and loans, many students and borrowers panicked. With millions depending on federal financial aid to afford college, the question quickly became: Will I still get my student loans, or is my funding at risk?
This is a breakdown of what happened, what programs were affected, and—most importantly—what this means for your student loans.
Did Trump’s funding freeze affect Student Loans?
The short answer: No, there was no effect on federal student loans.
The freeze on federal funding was very vague and led to widespread confusion. Later, the OMB clarified that any program “providing direct benefits to Americans” was explicitly excluded from the freeze. In other words, programs such as Social Security, Medicare, Medicaid, SNAP-what many people refer to as food stamps-and federal student loans would indeed go on.
The spokesperson for the Department of Education made clear that the freezing of funds only applied to discretionary grants, and not funding to student loans or even Pell Grants. Another way to look at it: If you’ve been sweating over your FAFSA application, student loan disbursement, or federal financial aid, well, you can stop worrying-the money’s still coming.
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Can I still apply for FAFSA and receive federal student aid?
Absolutely, the FAFSA is always up and ready to go. If you have not yet been able to, you can even file an application for aid for the 2024-2025 year now without any problem.
You can complete your FAFSA application at StudentAid.gov. The deadline for the 2024-2025 academic year is June 30, 2025. If you have not applied yet, now would be a great time to do so.
Due to the funding freeze, FAFSA was still available and application processing was not delayed. Your federal student loan, Pell Grant, and other need-based aid eligibility is not affected.
What types of education funding were affected by the Freeze?
While student loans and Pell Grants were not affected, some discretionary education grants were temporarily halted. Among them were:
- Research grants to universities
- Some federal work-study programs
- Institutional funding for colleges and educational initiatives
This temporary freeze understandably sent shock waves into schools and research institutions relying on federal funding, but it should not cause disruptions to such programs since it has been rescinded rather quickly.
Why did the Trump Administration Issue a funding freeze?
The White House had ordered the freeze to review federal spending and realign budget priorities. But the directive was muddled, leading to widespread confusion and consternation among recipients of federal aid.
But less than two days later, a federal judge put a freeze on the move, and the Trump administration rescinded the order. “To avoid confusion and unnecessary panic, the Administration is lifting its temporary freeze of the program,” said White House Press Secretary Karoline Leavitt.
What should you do if you are a Student Borrower?
Since your federal student loans and Pell Grants are safe, there is no immediate action needed. However, you should:
- Continue applying for FAFSA if you have not done so.
- Check with your school’s financial aid office to confirm your disbursement schedule.
- Stay informed about any policy changes that could impact student financial aid in the future.
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