Trump's sweeping changes to grants and loans begins now... here's what it means for you

The White House sent a shockwave through Washington, D.C. – and the country – when its budget office directed agencies to put congressional funding on a temporary hold.

Democratic lawmakers, progressive groups and those who could be affected by the pause were in an all-out panic on Tuesday as they scrambled to find out what the latest order means.

President Donald Trump's White House Office of Management and Budget (OMB) sent a memo Monday night telling its agencies to halt loan, grant and other federal assistance pending review to make sure it's in alignment with the new administration's priorities.

This means any initiatives that promote diversity, equity and inclusion (DEI) programs, 'wokeness,' transgender ideology and environmentalism could see their funding pulled.

Lawmakers are complaining that this a massive overreach and say a president cannot override congressional appropriations.

Confusion and chaos broke out across the country as officials at every level of government and their partners were left up-in-the-air on what money was about to freeze.

DEMOCRAT REACTION 

'Last night President Trump plunged the country into chaos without a shred of warning,' Senator Chuck Schumer (D-N.Y.) said.

He warned the memo impacts 'virtually all federal funds across the country' and said it would shut down billions, and maybe even trillions of dollars in direct support for states, cities, towns, schools, hospitals and businesses.

Democrats blasted the memo as poorly written and raised concerns over it hitting disaster assistance, local law enforcement, rural hospitals, aid to the elderly, food to people in need, early child care, cancer research clinical trials and more.

They also slammed the move as unconstitutional and an attempt by Trump to seize power.

'What happened last night is the most direct assault on the authority of Congress I believe in the history of the United States,' Senator Angus King (I-Maine) said.

But the White House says the review will only nix funding for any loans, grants and funding that does not align with the law of President Trump's priorities and pushed back on those classifying it as a funding 'freeze.'

'This is simply guidance for agencies to review if grants, loans, programs are in compliance with the President's EOs,' a senior administration official told DailyMail.com. 'Also, it very clearly states that it does NOT impact individual payments or assistance.'

'If the activity is not in conflict with the President's priorities, it will continue with no issues,' they added.

The memo reiterates that the pause is not meant to target any 'assistance provided directly to individuals,' such as Medicare or Social Security.

A senior administration official also said that the order will not have 'devastating impacts' like Democrats claim.

'OMB explicitly instructed agencies to identify programs with immediate deadlines so exceptions can be granted without any program impact,' they noted.

DOES IT VIOLATE THE IMPOUNDMENT ACT?

It appears Trump does hold the power to pause spending as long as it is subjected to review with an end date.

'[T]his is not a permanent stop of the funds,' an official said. 'This pause could be as short as a day if an agency determines that the funds at issue do not conflict with the Administration's policies.'

Trump made clear before his reelection that he believes laws curbing a president's power to withhold congressional spending are 'unconstitutional.'

Impoundment is an act by a U.S. president of not spending or refusing to spend money that Congress already appropriated.

Congress passed the Impoundment Control Act of 1974, which Trump now wants repealed or overturned by the Supreme Court.

A White House official said that the order 'is not an impoundment.'

'It is a temporary pause to give agencies time to ensure that financial assistance conforms to the policies set out in the President's executive orders, to the extent permitted by law,' they insisted.

EDUCATION GRANTS AND LOANS

The Department of Education said the OMB memo does not impact federal funds and loans it provides directly to students pursuing a degree.

'Title IV, HEA funds that are provided to individual students, such as Federal Pell Grants and Direct Loans, are not impacted by yesterday's guidance,' Madison Biedermann, the Deputy Assistant Secretary for Communication Strategy at DOE told DailyMail.com.

There are currently more than 40 million Americans with federal student loans and 7 million with federal Pell Grants, which are specifically for low-income students.

Students who rely on federal financial aid to pay for tuition, housing, meal plans, books and other education-associated costs are not expected to see a disruption from the pause.

DOE officials are still reviewing the effect of the memo.

A personal finance and lending expert said it remains unclear, however, if the order will affect the Free Application for Federal Student Aid (FASFA).

'As of now, we simply don't know what the impacts will be, or if there will be any impact at all. Federal student loan applicants and borrowers should assume it's business as usual unless specifically instructed otherwise.' Kate Wood told DailyMail.com.

IMMIGRATION AND REFUGEE ADVOCATES

The Justice Department halted its contracts to provide legal information and assistance to those facing deportation.

The DOJ issued a stop work order for nonprofits that provide orientation to migrants informing them of their rights and giving them information on the process ahead of them.

Trump has made clear his priority lies in a mass deportation plan. It appears funding for programs that assist undocumented aliens with remaining in the country could see their grants and loans stripped.

Amica Center for Immigrant Rights provides immigration orientation services to those held in detention centers by the federal government and facing deportation.

The nonprofit's executive director says they are now being blocked from their work.

Michael Lukens wrote in a statement on the funding pause: 'We will fight the mandated stoppage of our services in the public square, the courts, and the halls of Congress.'

The State Department also told groups providing temporary housing and job training to resettled refugees to immediately stop government-funded work.

Global Refuge claims this affects 5,870 refugees under its watch.

STATE INFRASTRUCTURE FUNDING

It's unlikely that Americans will see their bridge, road and other infrastructure projects be shut down with the latest order.

Officials in U.S. states are waiting on guidance to see how their jurisdictions will be affected by the memo.

Kansas Transportation Secretary Calvin Reed said he learned of the order Monday night and his agency is awaiting more guidance. In the meantime, he is reviewing the federal order.

Highway, bridge and other road projects rely heavily on federal fundings.

'We think it's a low risk for our typical everyday highway projects,' Reed said Tuesday in reference to the order impacting infrastructure projects in Kansas.

'The target seems to be some of the initiatives that the Trump administration has said publicly that they want to change, things like DEI, electric vehicle infrastructure,' he added before briefing a legislative committee on his department's operations.