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There has been significant activity and conflicting messages regarding obligated federal grant funding since Donald Trump returned to the White House in January, leaving many grant recipients and applicants uncertain about the future of their awarded funding. Given the evolving situation, the GrantExec team is closely monitoring the latest developments and providing real-time insights to help organizations navigate these disruptions and the near-term future of the federal grant market.
Timeline of Events
Week of January 20, 2025
White House Executive Orders on Funding The White House issued multiple Executive Orders (EOs) instructing federal agencies to halt grant funding for programs related to several policy areas of concern:
Illegal immigration
Foreign assistance
Climate/environmental justice
Diversity, equity, inclusion, and accessibility (DEIA)
Abortion
“Gender ideology”
Agency Funding Suspensions Federal agencies began independently suspending expenditures for programs under review, though these actions were inconsistent and lacked clear guidance.
HHS Communication Blackout The Department of Health and Human Services (HHS) imposed a communication freeze until February 1st, preventing officials from discussing funding decisions.
Monday, January 27, 2025: OMB Issues Guidance
OMB Memorandum The Office of Management and Budget (OMB) released a memo outlining a review process for all expenditures expected before March 15th. Agencies were required to complete a detailed questionnaire on over 2,600 programs by February 7th.
Immediate Uncertainty Agencies scrambled to assess compliance, creating an atmosphere of confusion for grant recipients.
Tuesday, January 28, 2025: Legal Challenges Begin
Temporary Stay A federal judge issued a temporary stay (effective until February 3rd) blocking OMB’s new guidance after Democracy Forward and other advocacy groups filed a lawsuit.
State Attorneys General Suit Twenty-two state Attorneys General filed a separate case in Rhode Island, challenging the administration’s authority to suspend legally appropriated funds.
Wednesday, January 29, 2025: White House Rescinds OMB Memo
Memo Withdrawal Facing legal pressure, the White House rescinded the OMB guidance, temporarily lifting the broad freeze on federal expenditures.
Agency Obligations Remain Even with the memo withdrawn, agencies must ensure that expenditures comply with both the new EOs and existing statutes, resulting in continued delays in grant disbursements.
Further Legal Action Expected The judge in the Attorneys General case signaled intent to issue a broader ruling that may further block expenditure suspensions.
Friday, January 31 – Monday, February 3, 2025: TRO Granted, DOJ Motion Denied
Temporary Stay -> Temporary Restraining Order (TRO) In the case National Council of Nonprofits et al. vs. Office of Management and Budget, the presiding judge granted another TRO against the administration’s plan to halt federal grants and loans:
The Department of Justice’s motion to dismiss was denied.
OMB is enjoined from reinstating or implementing any directive to halt federal spending broadly.
OMB must provide notice to all federal agencies, instructing them to release any funding that was paused under the directive.
The court order can be accessed here.
Impact on Agencies This ruling represents a significant setback to the administration’s attempts to freeze funding. Agencies are now scrambling to interpret and comply with the judge’s order—meaning many previously paused or halted disbursements may resume.
February 2, 2025: NSF System Back Online
NSF Funding Disbursements
The National Science Foundation (NSF) disbursement system for grantees had been down since January 27, but came back online on Feb 2.
For more details on NSF’s implementation of the executive orders, visit this NSF page.
February 3, 2025: Court Issues Second TRO
U.S. District Judge Loren L. AliKhan issued a second Temporary Restraining Order (TRO) expanding protections against the funding freeze, explicitly enjoining OMB from "implementing, giving effect to, or reinstating under a different name" Directive M-25-13.
February 10, 2025: Court Clarifies TRO Scope and Orders Immediate Fund Restoration
U.S. District Judge John J. McConnell issued a critical clarification to his February 3 TRO, explicitly prohibiting all categorical freezes tied to the Office of Management and Budget (OMB) Directive M-25-13 or President Trump’s executive orders (EOs). The order mandated:
Immediate restoration of frozen funds, including those under the Infrastructure Investment and Jobs Act and Inflation Reduction Act.
Resumption of disbursements for agencies like the National Institutes of Health (NIH).
Removal of administrative hurdles delaying implementation.
Judge McConnell emphasized that the freeze caused “irreparable harm” and likely violated constitutional spending powers. The administration appealed to the First Circuit Court of Appeals, but the TRO remains in effect during litigation.
February 12, 2025: DOE Disburses $782 Million Amid Reviews
The Department of Energy (DOE) announced a $782 million disbursement under its Loan Programs Office (LPO) for sustainable aviation fuel development, marking the first major funding release since the freeze began. This action followed the court’s TRO but coincided with DOE’s broader review of grants and loans to ensure alignment with EOs like Unleashing American Energy. Energy Secretary Chris Wright stated that while the DOE must “follow the law” on existing commitments, future funds will prioritize the administration’s energy agenda.
February 18, 2025: Agencies Navigate EO Compliance and Legal Challenges
NIH Indirect Cost Rate Adjustments Paused
The NIH attempted to cap Facilities and Administrative (F&A) rates at 15% via NOT-OD-25-068, but multiple TROs halted enforcement. Research institutions like Virginia Commonwealth University are maintaining negotiated rates pending further court rulings.
EPA Solar for All Grants Remain Frozen
Despite the TRO, the Environmental Protection Agency (EPA) has not resumed $7 billion in Solar for All grants, citing ongoing reviews of EO compliance.
NEA Reschedules Grant Deadlines
The National Endowment for the Arts revised FY 2026 guidelines, canceling its February 13 deadline and rescheduling to March 11 and July 10, 2025. Applicants must now demonstrate five years of programming history, with pandemic-era flexibility.
February 19–23, 2025
First Circuit Appeal: The administration’s appeal against the TRO is pending, with oral arguments expected in early March.
Agency Discretion: Departments like Labor and Transportation resumed some grants but are scrutinizing programs related to DEI (Diversity, Equity, Inclusion), climate initiatives, and foreign aid under EOs.
State and Nonprofit Litigation: New lawsuits challenge agency-specific pauses, arguing violations of the Administrative Procedure Act and constitutional overreach.
March 6, 2025: Two Critical Federal Grant Funding Court Decisions
Federal Grant Disbursement Injunction Upheld The U.S. District Court for Rhode Island has reaffirmed its earlier injunction preventing the administration from freezing or delaying disbursement of already-approved federal grant funds. The ruling specifically addresses concerns from state agencies, universities, and nonprofit organizations that had received award notifications but experienced delays in receiving actual disbursements. The court determined that withholding approved funds violated Administrative Procedure Act requirements.
NIH Indirect Cost Rate Cap Temporarily Blocked A separate federal court ruling has temporarily halted implementation of the administration's directive to cap indirect (F&A) costs at 15% for National Institutes of Health research grants. The court found that plaintiffs - including major research universities and medical centers - demonstrated a likelihood of irreparable harm, as the cap would have immediately affected ongoing research programs. Current indirect rates, which average 52% at major institutions, will remain in effect pending further legal proceedings. Reference:
Dates to Watch:
March 14, 2025: Expiration of the continuing resolution for FY25 funding.
August 1, 2025: Launch of DOT’s Large Bridge Grant applications.
Fall 2025: Expected rulings on NIH’s indirect cost litigation.
Additional Agency-Level Shifts
USDOT Renames RAISE to BUILD
The Department of Transportation changed the name of the “RAISE” program back to “BUILD,” a title used under the previous Trump Administration.
The recent Notice of Funding Opportunity (NOFO), which closed last Thursday, was also rewritten to remove language referencing the Biden Administration’s EOs.
Further information is available on the DOT’s BUILD Grants page.
Agency Websites Reorganized
Multiple agencies, including the Department of Energy (DOE), are reorganizing web content to reflect the style and priorities of the Trump Administration.
The new main landing page for DOE is here.
Grant Application Periods Closed
Several agencies have prematurely closed grant application periods for funding opportunities that had been open prior to the recent executive orders.
We are actively tracking over 200 programs that appear to have closed outside of their normal schedules. Visit the Grants Explorer on the GrantExec platform to review each grant. Notably, there are still over 2,000 active federal grant opportunities. If you or your clients have questions about specific opportunities, please contact us.
🔎 What This Means for Federal Grant Recipients
Even though the OMB memo has been rescinded, agency-level suspensions remain widespread due to ongoing compliance reviews. Federal agencies must now:
Review all expenditures to ensure they align with the new EOs.
Await approval from political appointees, who are not yet in place at many agencies.
Determine exemptions for critical programs such as Medicare, Medicaid, Social Security, and Veterans benefits.
Key Takeaways:
Federal funding freezes are expected to persist in the short term, varying across agencies.
Political appointees play a key role in resuming grant expenditures, but many positions remain unfilled.
Programs not directly tied to the “hot-button” policy areas in the EOs may see funding restored in the coming days/weeks once agency reviews are complete.
📌 What Should Grant Recipients Do Now?
1️⃣ Assess Your Grant’s Risk Level
While the OMB’s central review has been withdrawn, agencies are likely using similar criteria to review funding internally. We recommend reviewing the following litmus test questions originally included in the OMB memo:
Does the grant program align with newly issued Executive Orders?
Does the expenditure comply with statutory requirements?
Does the program rely on agency discretionary funding that could be redirected?
Could the funding decision be politically sensitive?
If any of your grants/contracts may raise flags based on these considerations, prepare for possible continued delays and proactively engage with agency contacts for updates.
2️⃣ Track and Document Financial Disruptions
Work with your finance teams to document any missed payments, additional costs, or delays in project timelines.
If these disruptions impact service delivery, program timelines, or staffing, document those effects carefully—this will be crucial information for advocacy efforts.
These data points can be shared with Members of Congress, who are monitoring the situation closely and may push for interventions.
3️⃣ Stay Engaged with Federal Agencies and Congressional Offices
Continue checking with your agency program officers for the latest updates on funding timelines and required compliance reviews.
If delays in payments or approvals are impacting critical projects, consider reaching out to your congressional representatives to highlight the real-world consequences.
📢 What’s Next?
Short-Term Outlook (Next 1-2 Weeks)
Agency Response to Court Orders
OMB and federal agencies are under judicial direction to release or reinstate funding that was paused. Expect interim guidance memos as agencies adapt to the TRO.
Policy Rewrites & Website Updates
Watch for more changes to program names, priorities, and NOFO language as agencies align with the Trump Administration’s EOs.
Possible Further Legal Action
Additional lawsuits or TROs could further alter agency behavior. Monitor news from the courts daily.
Long-Term Outlook (Beyond February 2025)
Congressional Intervention Possible
If grants remain suspended or slowed, bipartisan pressure in Congress may build to restore funding flows.
Formal Guidance from Agencies
Eventually, agencies will clarify how they’ll implement these EOs long term, reducing confusion for grant recipients.
GAO Investigations
The Government Accountability Office (GAO) may investigate potential violations of the Impoundment Control Act or other federal statutes—though such reviews often take months or years.
💡 Diversify with State, Local, & Private Funding
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🤝 We're in This Together
While the situation remains fluid, most federal grant programs will likely see funding resume in the coming weeks—especially those not directly tied to contentious policy areas. However, continued scrutiny and delays should be expected as agencies conduct compliance reviews.
Federal policies shift, but our commitment to your success does not. We’re here to provide guidance, connections, and resources to ensure your impactful work continues uninterrupted.
📢 Stay tuned for updates—we’ll share more as the situation develops. And, as always, we’ll continue researching new grant opportunities for you every day.
💙 Thank you for your dedication, and for trusting us to stand by your side in uncertain times.
📩 Need direct guidance? Reach out to us—we’re here to help.