OMB Rescinds M-25-13 Grant and Loan Freeze After Court Stay

OMB Memorandum M-25-13 directed all federal executive departments and agencies to temporarily pause obligations and disbursements of federal financial assistance, including grants, cooperative agreements, and loans, while agencies reviewed programs for alignment with new executive orders on DEI, foreign aid, NGOs, and climate policy. A separate 52-page memo identified programs subject to review, with broad exceptions clarified by OMB on January 28 covering Pell Grants, student loans, Social Security, Medicare, Medicaid, SNAP, small business funds, Head Start, and rental assistance. District Judge Loren Alikhan issued an administrative stay of the freeze through February 3, after which OMB released a second memorandum on January 29 rescinding M-25-13 entirely and directing questions to agency general counsel. Sophisticated counsel advising recipients of federal funds, universities, NGOs, and contractors should monitor ongoing agency-by-agency review, watch for successor guidance implementing the underlying executive orders, and assess whether disbursement delays during the brief pause triggered contract, reporting, or compliance obligations. Next development to watch: any replacement OMB or agency-level directives and further court proceedings.