A federal judge has temporarily blocked the funding freeze announced earlier this week by the Trump administration, offering a brief reprieve to affected organizations. However, uncertainty remains as legal battles continue. Here’s what you need to know.

What Happened?

On January 27, 2025, the Trump administration issued an order temporarily halting federal grants, loans, and financial assistance to reassess program alignment with new administration priorities. The freeze applied to:

  • Grants, cooperative agreements, loans, and loan guarantees to non-governmental entities
  • Diversity, Equity, and Inclusion (DEI), sustainability, and gender policy programs, which faced additional scrutiny
  • Certain federally funded nonprofit and educational initiatives, causing widespread uncertainty

Who Was Affected?

While programs such as Medicare, Social Security, student loans, and food assistance were exempt, many universities, nonprofits, research institutions, and municipalities faced immediate funding risks.

The directive led to confusion, with grant recipients, state agencies, and lawmakers scrambling to understand its full impact. Some agencies even postponed grant review panels due to the uncertainty.

Judge Issues Temporary Block

On January 28, 2025, just minutes before the freeze was set to take effect, U.S. District Judge Loren AliKhan issued an administrative stay, temporarily halting the order. This ruling came after nonprofit groups filed a lawsuit, arguing that the freeze was unconstitutional.

The stay remains in effect until Monday, February 3, 2025, when the court will hear further arguments.

What This Means Now

✅ Funding Continues (For Now): Grants and loans remain active, but the situation is evolving.
⚠️ Uncertainty Persists: The White House has not yet responded, and federal program reviews are ongoing.
📅 Further Legal Action Expected: The court hearing on Monday, February 3, 2025, will determine whether the freeze stays blocked or moves forward.

What You Can Do Next

✔ Continue Fund Drawdowns – If you have approved funding, proceed while the stay is in effect.
✔ Stay in Contact with Granting Agencies – Expect possible delays in disbursements or new approvals.
✔ Prepare for Additional Changes – Agencies must report funding evaluations by February 10, 2025, which could bring further policy shifts.

How LGA Can Help

At LGA, we understand the impact this uncertainty can have on your organization. Our team is ready to assist with:

  • Alternative Funding Strategies – Exploring non-federal funding sources to help maintain financial stability
  • Contingency Planning – Developing strategic plans to navigate potential delays or funding reductions

We will continue monitoring the situation closely and provide updates. If you need guidance or have concerns about how this may affect your organization, contact LGA today. We are here to help you stay informed and prepared.