Federal Judge Halts Trump Administration’s Freeze on Federal Grants and Loans

Trump Administration Blocked by Federal Judge: Grants and Loans Protected

On January 28, 2025, U.S. District Judge Loren AliKhan issued a temporary injunction against the Trump administration’s directive to halt federal grants and loans. This pause was initially ordered by Acting Office of Management and Budget (OMB) Director Matthew Vaeth, citing concerns over funding for diversity, equity, and inclusion (DEI) programs and other initiatives.

The freeze excluded direct assistance programs like Social Security and Medicare but encompassed a wide range of other federal financial assistance programs.

The injunction was granted following a lawsuit filed by non-profit organizations and small businesses, which argued that the funding freeze was illegal and detrimental to recipients relying on these funds. The temporary block is in effect until a scheduled hearing on February 3, 2025.

The administration’s freeze had led to significant confusion and disruptions, with reports of inaccessible reimbursements for programs like Medicaid and Head Start. In response to the injunction and ensuing confusion, the OMB retracted the initial memo on January 29, 2025.

White House Press Secretary Karoline Leavitt stated that efforts to restrict federal funding in line with President Trump’s executive orders would continue, despite the retraction.

This legal challenge underscores the ongoing tension between the executive branch and various organizations over the administration’s budgetary policies and their implementation.

For more information, you can watch the following news report: