If you've been reading the news over the last year or so, you might have read about hundreds of agencies getting their funding cut, and that includes a pause on federal grants. Federal grants are the lifeblood of many different sectors in the American economy, including some of the most important ones like education. Many people in the education sphere are asking themselves what to do with federal grants, when they will end, and what happens next, as it pertains to the education sector.

Why have they paused federal grants?

Federal grants were paused at the start of 2025 due to an executive order requiring agencies to review how funds were being used. It was part of a broader spending cut initiative delivered by the new administration, illustrated by the Musk-headed DOGE department.  The government wanted to make sure that new disbursements and obligations matched current priorities and complied with oversight standards. As a result, many grants were temporarily put on hold while agencies conducted these reviews.

How has a pause in federal grants affected education?

In education, this resulted in a partial cancellation of previously approved programs, such as HEERF, ESSER, and others that were geared towards certain community needs. Districts that had planned to use funds through 2025 and 2026 suddenly faced uncertainty. Some states had already budgeted programs expecting reimbursements, so the pause created confusion and disruption. Later legal and policy reversals allowed many grants to resume, but the interruption showed everyone exactly how dependent schools had become on temporary federal relief.

Federal grants aren’t just line items in a budget; they represent one of the largest financial lifelines connecting the federal government to schools, communities, and families. To understand why a pause matters, it helps to see a visualization of dollars flowing through these programs every year. In recent years, grant outlays have topped the trillion-dollar mark, representing around 4% of the U.S. economy. A pause, even for a bit, puts hundreds of billions of dollars in limbo and leaves communities waiting to see which programs will restart and which may shrink.

Total federal grants to states and local governments, FY2020–FY2024

Understanding what it means when federal grants are paused

When funding is described as “paused,” it usually means payments are temporarily on hold while agencies review budgets, priorities, or legal processes. It is not the same as a permanent cut.

For schools, this pause can feel like a traffic light turning red. You can’t move forward yet, but it doesn’t mean the road is closed forever. Educators may delay new programs, parents might worry about reduced support, and teens could see fewer opportunities until the funding flow resumes.

Examples of programs affected

• After-school tutoring for math and reading
• Nutrition programs providing free or reduced-price meals
• Financial literacy and career-readiness workshops
• Counseling services that address stress and mental health

What federal grants are paused?

Healthcare grants

The pause covered community health programs and research dollars flowing through NIH and HHS. Grants to hospitals, clinics, and nonprofit health organizations were frozen or slowed while agencies reviewed alignment with new policies. Many providers are unsure whether planned projects in public health and biomedical research can move forward on schedule.

Early education and child care

Programs like Head Start and Child Care and Development Block Grants are in a holding pattern. Families are still receiving direct benefits, but discretionary funding that districts and providers use for expansion and staff training has been disrupted. Hiring plans are on pause, and facility upgrades tied to those dollars are stalled.

Education grants

Beyond ESSER, schools and colleges are already feeling the slowdown in research funding, teacher training grants, and after-school programs such as 21st Century Community Learning Centers. Administrators are waiting longer for reimbursements and new awards, forcing them to freeze programs or scale back until agencies provide clear guidance.

Infrastructure and environmental grants

Discretionary dollars for school facility upgrades, broadband access, HVAC systems, and environmental projects have also been put on hold. Districts that had projects ready to launch are now facing delayed timelines, leaving students and staff waiting for much-needed improvements.

Foreign aid and international programs

Education exchanges and nonprofit partnerships connected to USAID and State Department grants are stuck in limbo. Organizations with staff on the ground abroad are unsure how to continue services without timely reimbursements, creating ripple effects for schools involved in global education partnerships.

Research, arts, and humanities

Universities and cultural institutions are dealing with paused discretionary grants that support research, arts, and social innovation. Some institutions have stopped submitting new applications altogether, worried that approvals may never come through.

Why grant distribution matters for understanding pauses

When we talk about federal grants being paused, it helps to step back and look at how grant money is usually distributed across major categories. The chart below shows the percentage breakdown of federal grant outlays to state and local governments. While this isn’t a map of paused dollars specifically, it does highlight where the greatest exposure lies if cutbacks or delays ripple through the system. Since health and Medicaid consistently make up the majority of grants, even a temporary disruption in that category carries wide consequences, while education, social services, and infrastructure also stand at risk when funding slows.

Which federal grants are paused for schools?

There are a ton of different federal grant programs in the US that deal with education. Below is a list of federal grant programs geared towards school districts, what happened with the pause, and the impact on schools and districts. All programs below were affected with the exception of one.

What's the future like for federal grants and schools?

For school districts and educators, the outlook for federal grants is cloudy at best. Since the 2025 pause, agencies have been auditing their oversight structure and have put particular emphasis on funds being provided to schools involved in things like DEI, climate, and social initiatives. That being said, there are still opportunities to get federal grants in the education sector if the program is right. For example, new tech initiatives that harness things like AI to address certain learning deficiencies could receive special treatment.

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Formula-driven programs like Title I and IDEA are expected to remain stable, but discretionary grants will face tighter scrutiny and shifting priorities. Districts that expanded tutoring, after-school programs, and mental health services with temporary relief dollars are now confronting the challenge of sustaining them. With ESSER winding down and certain mental health grants already reduced, schools will need to show clear, measurable results and align proposals closely with federal priorities to remain competitive for funding.

How to take advantage of the federal grant pause

Not everything is paused! Some things have even been given priority

Even though federal discretionary grants have been paused or reshaped, this environment actually highlights why a program like Thrivenest is built to thrive. Most paused initiatives are those where outcomes are vague or where oversight is hard to enforce. Thrivenest flips that problem on its head.

As an AI-driven platform, every action and result can be logged, tracked, and reported in real time. That gives grantmakers exactly what they’re asking for: transparency, accountability, and measurable outcomes. Where many community programs struggle to prove impact, Thrivenest can deliver dashboards, usage data, and performance metrics on demand.

The administration hasn’t walked away from tech; if anything, it’s doubling down on projects that use data to serve underserved groups more efficiently. Programs tied to financial inclusion, digital equity, small business access, and education support are still live, and Thrivenest slots directly into those priorities. It’s technology that scales, it’s low-cost per user, and it directly addresses the gap policymakers keep pointing out: underserved families and students left behind by traditional financial systems.

In short,  a lot of grants have gone quiet, but the ones still moving require exactly what Thrivenest does best. It offers measurable results, scalable impact, and a clear fit with federal priorities around tech, equity, and inclusion.

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FAQ

How long can a federal grant pause last?

A pause can last anywhere from a few days to several months, depending on the scope of the review. While some programs resumed quickly after legal pushback, others remain slowed while agencies decide how to proceed, leaving schools and communities in limbo.

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Are states allowed to step in and cover paused grants?

Yes, some states create temporary funding bridges when federal dollars stall, especially for programs considered essential, like meal services or after-school care. However, not every state has the budget flexibility to do this, and the support is often limited in both scope and duration.

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Do paused grants affect nonprofit organizations as well as schools?

<p>Absolutely. Nonprofits that run community health clinics, early childhood programs, or arts initiatives often rely on federal grants. When funds are paused, many nonprofits face staff cuts, delayed projects, or even closure, putting pressure on local communities to fill the gaps.</p>

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Can paused grants ever be canceled permanently?

Yes, if a review determines a grant program no longer aligns with federal priorities, the pause can shift into cancellation. That risk is highest for competitive and discretionary programs, while formula-based grants like Title I or Pell Grants are protected by law and usually continue without interruption.

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