UPDATE 1/29/2025: Well, shortly after we published the Digest, the OMB reversed course and rescinded the pause described below. Onward!

Like the proverbial bull in a China shop, the Trump administration has upended decades of standards, norms, and precedents. In the last several days, we’ve seen the U.S. Department of Education (ED) tout its efforts to eliminate Diversity, Equity, and Inclusion within the agency, and then we saw the entire landscape shake with the administration putting a “pause” on all activities related to federal grant, loan, and financial assistance programs that “may be impacted” by the administration’s executive orders. Fortunately, a federal judge put a temporary halt on the “pause” until February 3, 2025.

Thousands of federally funded programs are under review (including GEAR UP) so that the new administration can assess the alignment or misalignment between these programs and their executive orders. While the White House took some steps to clarify the scope of their order, the expansive and devastating nature of the policy was met with substantial resistance and immediate legal action taken by states and non-profits.

With the situation unfolding in a confusing manner, definitive answers on what this means for GEAR UP are still unclear. We will, however, do our best to share our perspective on what is happening now, and will share ongoing updates in future Digests.

Is GEAR UP included in the pause on federal grants?
Yes, if enacted, GEAR UP will be included in the pause. GEAR UP was not included in the Office of Management and Budget’s (OMB) examples of exempted programs.

OMB has clarified that Pell Grants and Direct Loans are exempt from the pause, and ED has shared with reporters that Title I, IDEA, and other formula grants are exempted as well. The Washington Post has a summary of what is known thus far and what remains unclear.  

What exactly is being paused? 
The memorandum states that until otherwise approved, federal agencies must pause the “issuance of new awards,” the “disbursement of Federal funds under all open awards;” and “other relevant agency actions.”

The big question that has remained unanswered to our satisfaction is how the pause will impact programs like GEAR UP, where this year’s funding has already been disbursed in full and placed into each grantee’s G5/G6 grants payment account. 

Our engagement with contacts in the federal government points to the reality that this enormous policy initiative was unexpected and the confusing nature of the roll out certainly reflects that. As of today, ED still has not issued any formal communication about the implementation of the pause.

How long is the pause for?
The pause was scheduled to begin on January 28, but due to the federal court’s intervention, the pause has been blocked until at least February 3, 2025. Pending the outcome of the hearing, the pause could begin shortly thereafter or halted again.

The OMB is requiring that agencies—including ED—provide them with information related to federal programs (like GEAR UP) by February 10, 2025. If implemented, the pause would presumably be in place until OMB “approves” that the program can proceed as intended. The OMB guidance does not include an end date for the review process.

How will the OMB be assessing GEAR UP?
At the heart of the OMB’s memorandum is the statement that “the use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve.”

Among all their programs, ED will be providing OMB with details about when GEAR UP is expected to make future funding announcements, the schedule for disbursing funds, if the program serves “removable or illegal aliens,” and if the program runs counter to any of the recently issued executive orders. The anti-DEI executive order is likely to trigger the most scrutiny for GEAR UP.

While we all know that GEAR UP students are largely deemed eligible based on factors related to family income, the anti-DEI executive order is quite expensive. Of notable concern is the broadness of the order, including a focus on “‘equity-related’ grants or contracts.” Will OMB identify GEAR UP as being “equity-related,” and therefore potentially conflicting with this order? We can’t say with any assurance.  

We would expect the ED political leadership and OMB to examine the legislation, regulations, Annual/Final Performance Reports, and the application packages for new awards to assess if GEAR UP conflicts with recently issued executive orders.

Is this legal?
Given that the GEAR UP funds have already been obligated, we believe any action preventing you from deploying those resources for the purposes authorized by legislation is unlawful. We’ve never seen anything like a pause of this size and scope and many believe that this is the first stage of a long-term legal battle as the President seeks to wrest away authorities that are constitutionally vested with Congress. Despite the OMB’s claims that the freeze is temporary, we fear that this could be a form of impoundment. We’ll be watching to see how Congress and the courts respond.  

Can we continue to work on GEAR UP programming?
Yes, you can and should continue working on GEAR UP. As of today, the pause did not explicitly include a stop order on grant-funded activities, nor has ED suspended the grant accounts associated with GEAR UP awards. Until told otherwise by ED, GEAR UP should be moving forward with all planned activities. We’ll be doing everything in our power to make sure GEAR UP services can be implemented without interruption.  

Can we draw down our federal dollars from G5/G6?
Yes, as of today, the G5/G6 grants payment system is open. If the pause is later operationalized, we are urging grantees to prepare for the possibility that ED may temporarily close the grants payment system. As such, we are urging GEAR UP Directors to coordinate with their organizational leaders to either (1) allow for an early draw down of near-term expenses (advance payments), or (2) secure a commitment from the organization to cover upcoming GEAR UP expenses with non-federal dollars until the pause is over, when they can draw down a full reimbursement.

Will the GEAR UP competition be delayed? 
The court’s emergency stay that blocks the pause will run through “at least” 5:00 PM Eastern Time on February 3, 2025, which is coincidentally, the due date of the 2025 GEAR UP State and Partnership applications. Given that the next hearing is scheduled to take place at 11:00 AM Eastern Time on February 3, we urge all applicants to submit their applications prior to 11:00 AM out of an abundance of caution.

Of course, the successful submission of the application is only the first step in a long process that involves ED and Congress, so there will be ample opportunities for the grant-making cycle to be delayed.  We’ll keep you posted as the situation develops.