On January 27th, President Donald Trump signed an executive order that temporarily paused federal spending programs, but it was unclear whether this applied to federal student loans and grants. This uncertainty, compounded by a memo from the Office of Management and Budget requiring federal agencies to review all financial assistance programs in line with the administration’s policies, led to widespread confusion among college students. Though it was later clarified that loans and grants would not be affected and the memo has since been rescinded, the initial panic showed how crucial federal aid is to students.
The executive order immediately raised the eyebrows of many college students as they questioned the future of their federal aid. Yona Gatty, a junior forensic chemistry student at Ole Miss, says that he worries about his future ability to obtain federal student loans.
“To be honest, it’s still unclear how it will affect me personally. I have concerns about how it could affect being able to get federal student loans. As a whole, there’s a lot of gray area right now.”
According to PrepScholar.com, 45 percent of Ole Miss students take out federal loans to pay for school, while 80 percent of students receive some type of financial aid to cover educational costs, which shows how impactful a pause on financial aid would be for most students. In addition, according to Forbes, only about one in eight students win enough scholarships to cover the cost of their tuition, leaving students the responsibility of finding ways to pay the rest. Tuition, housing, textbooks, meal plans, and other expenses quickly add up, making federal aid a crucial financial resource.
The uncertainty led many students to seek answers wherever they could be found, fearing that if federal disbursements stopped then they would be left unable to continue their education. This further highlights how important clear communication is in policymaking, and how misinformation can spread quickly.
Georgette Gulley, a public policy student at Ole Miss, helped provide some insight into the broader implications of a temporary funding pause.
“Although this recent pause didn’t affect loans and grants, it showed how much students and universities depend on federal funding. A future pause that does impact higher education could raise questions about how much institutions should rely on government assistance.”
Gulley also pointed out that this pause is part of a larger effort to reduce government spending and how much it reflects ongoing debates about federal involvement in higher education.
“On the conservative side, there is increasing opposition that the government should be the main source of funding for college education. They argue that universities need to take more responsibility for controlling costs instead of depending on federal aid. However, this situation also shows the dangers of sudden policy changes, which can create unnecessary panic and uncertainty for students who do depend on these programs.”
Financial aid experts have also weighed in on the potential consequences of pausing federal student aid. Betsy Mayotte, president and founder of The Institute of Student Loan Advisors, explained in a recent publication, “If federal aid disbursements stopped, a significant number of borrowers wouldn’t be able to continue their schooling. That is not an outcome [the administration] would want on its resume.”
Mayotte also said that a move like that would require congressional approval, and that the system of checks and balances would make it very difficult to suddenly cut funding like that. “An executive order can’t be contrary to federal law. We saw that with the Biden administration. We saw that with the prior Trump administration, with the borrower defense debacle. Only Congress can change federal law.”
The reaction to this executive order shows how important federal financial aid is for millions of students, and how unclear communication from policymakers can lead to unnecessary fear. The perspectives from students, policy analysts, and financial aid experts show how complex government funding decisions are. The future of federal aid remains uncertain, but being prepared for potential shifts will help students and institutions navigate any changes later on down the road.