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21 May 2025

Impact Of Executive Orders On Recipients Of Federal Funds, Part 2

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In this continuing series, we take a closer look at recent executive orders and related actions directly impacting recipients of federal funds, including exempt organizations, non-governmental organizations...
United States Government, Public Sector

In this continuing series, we take a closer look at recent executive orders and related actions directly impacting recipients of federal funds, including exempt organizations, non-governmental organizations (NGOs) and universities.

In Part 2 below, we will summarize these specific EOs and what they mean for the exempt organization and higher education sectors.

1. Additional Measures to Combat Anti-Semitism

This EO is aimed at stopping anti-Semitism on college campuses.

The EO "reaffirms Executive Order 13899 and directs additional measures to advance the policy thereof in the wake of the Hamas terrorist attacks of October 7, 2023, against the people of Israel." It directs the heads of executive agencies and the Attorney General to review complaints and actions taken in connection with anti-Semitic actions on college campuses. This EO also directs the Secretary of Education to "include an inventory and an analysis of all Title VI complaints and administrative actions, including in K-12 education, related to anti-Semitism — pending or resolved after October 7, 2023 — within the Department's Office for Civil Rights."

One aspect of this EO has involved the revocation of student visas and the actions taken against higher educational institutions in light of alleged anti-Semitic activities on college campuses. The EO provides that "Secretary of State, the Secretary of Education, and the Secretary of Homeland Security, in consultation with each other, shall include in their reports recommendations for familiarizing institutions of higher education with the grounds for inadmissibility under 8 U.S.C. 1182(a)(3) so that such institutions may monitor for and report activities by alien students and staff relevant to those grounds and for ensuring that such reports about aliens lead, as appropriate and consistent with applicable law, to investigations and, if warranted, actions to remove such aliens."

It has been reported that many student visas have been cancelled, but it is unclear whether they are solely being cancelled in connection with this EO.1 These actions are currently being challenged, and the outcome is an evolving area.

2. Ending Radical and Wasteful Government DEI Programs and Preferencing

This EO stems from an earlier rescission of an order, EO 13985, "Advancing Racial Equity and Support for Underserved Communities Through the Federal Government," issued by the Biden administration. It seeks to end all DEI programs in the federal government, or that are funding by the federal government.

This EO provides that "[t]he Director of the Office of Management and Budget (OMB), assisted by the Attorney General and the Director of the Office of Personnel Management (OPM), shall coordinate the termination of all discriminatory programs, including illegal DEI and 'diversity, equity, inclusion, and accessibility' (DEIA) mandates, policies, programs, preferences, and activities in the Federal Government, under whatever name they appear."

Consistent with an earlier EO, Ending Illegal Discrimination and Restoring Merit-Based Opportunity (January 21, 2025), DEIA includes a directive to "terminate, to the maximum extent allowed by law, all DEI, DEIA, and 'environmental justice' offices and positions (including but not limited to 'Chief Diversity Officer' positions); all "equity action plans," "equity" actions, initiatives, or programs, "equity-related" grants or contracts; and all DEI or DEIA performance requirements for employees, contractors, or grantees."

The EO also includes a directive for "each agency, department, or commission heads" to provide to the Director of the OMB a list of items, including all "Federal contractors who have provided DEI training or DEI training materials to agency or department employees; and Federal grantees who received Federal funding to provide or advance DEI, DEIA, or "environmental justice" programs, services, or activities since January 20, 2021."

In addition to reaching back to January 20, 2021, covering the period of the Biden administration, this EO has, and will continue to have, far-reaching implications in the NGO sector. The OMB issued a funding freeze memorandum,2 which was rescinded.

Implementation of this EO has been seen in the termination of various federal government contracts, many of which have been challenged or rescinded. While there is some overlap between this EO and the Ending Illegal Discrimination and Restoring Merit-Based Opportunity EO, this EO focuses on federal government positions, activities, contracts and grants.

3. Unleashing American Energy

This EO terminates the Green New Deal, eliminates the Electric Vehicle mandate, expands energy exploration on federal lands and waters, and rescinds various environmental, sustainability, Science/Technology and climate-related executive orders.

In addition, this EO states that it is U.S. policy:

"to establish our position as the leading producer and processor of non-fuel minerals, including rare earth minerals, which will create jobs and prosperity at home, strengthen supply chains for the United States and its allies, and reduce the global influence of malign and adversarial states;

to protect the United States' economic and national security and military preparedness by ensuring that an abundant supply of reliable energy is readily accessible in every State and territory of the Nation;

to safeguard the American people's freedom to choose from a variety of goods and appliances, including but not limited to lightbulbs, dishwashers, washing machines, gas stoves, water heaters, toilets, and shower heads, and to promote market competition and innovation within the manufacturing and appliance industries;

to ensure that the global effects of a rule, regulation, or action shall, whenever evaluated, be reported separately from its domestic costs and benefits, in order to promote sound regulatory decision making and prioritize the interests of the American people; and

to ensure that no Federal funding be employed in a manner contrary to the principles outlined in this section, unless required by law."

As with other EOs, this EO will impact federal funding of various environmental, climate and sustainability endeavors. The EPA has started to announce the cancellation of various grants in connection with this directive.3 This EO is currently being challenged in litigation.

4. Protecting American Energy from State Overreach

This Executive Order intersects with the Unleashing American Energy EO, and seeks to challenge state actions including those on the environment and climate change.

The EO provides that "the Attorney General, in consultation with the heads of appropriate executive departments and agencies, shall identify all State and local laws, regulations, causes of action, policies, and practices (collectively, State laws) burdening the identification, development, siting, production, or use of domestic energy resources that are or may be unconstitutional, preempted by Federal law, or otherwise unenforceable. The Attorney General shall prioritize the identification of any such State laws purporting to address "climate change" or involving "environmental, social, and governance" initiatives, "environmental justice," carbon or "greenhouse gas" emissions, and funds to collect carbon penalties or carbon taxes."

Although the EO appears to focus solely on environmental matters, this directive includes "social and governance" initiatives and may seek to include various state actions in the "DEIA" space, which is broadly defined by the administration. There will likely be challenges to this EO once implementation begins.

5. Restoring Public Service Loan Forgiveness

This Executive Order disqualifies working for certain nonprofit organizations from public service loan forgiveness.

Specifically, "[t]he Secretary of Education shall propose revisions to 34 C.F.R. 685.219, Public Service Loan Forgiveness Program, in coordination with the Secretary of the Treasury as appropriate, that ensure the definition of "public service" excludes organizations that engage in activities that have a substantial illegal purpose, including:

(a) aiding or abetting violations of 8 U.S.C. 1325 or other Federal immigration laws;

(b) supporting terrorism, including by facilitating funding to, or the operations of, cartels designated as Foreign Terrorist Organizations consistent with 8 U.S.C. 1189, or by engaging in violence for the purpose of obstructing or influencing Federal Government policy;

(c) child abuse, including the chemical and surgical castration or mutilation of children or the trafficking of children to so-called transgender sanctuary States for purposes of emancipation from their lawful parents, in violation of applicable law;

(d) engaging in a pattern of aiding and abetting illegal discrimination; or

(e) engaging in a pattern of violating State tort laws, including laws against trespassing, disorderly conduct, public nuisance, vandalism, and obstruction of highways".

It is unclear how this EO will be implemented in light of the broad categories above and other executive orders that consider DEIA and environmental justice programs to be forms of illegal discrimination. This EO has not yet been challenged, and the regulations have not yet been revised.4

This EO will have broad implications on those who work in the nonprofit sector and expect that their student loans may be forgiven after working in a public service capacity.

A Note on DOGE

The Department of Government Efficiency (DOGE) was created by executive order and replaced the United States Digital Service.5 Although the breadth and structure of DOGE is unclear and in the midst of challenges, all organizations and companies that receive federal funding should note that DOGE recently sought to embed a staff member at The Vera Institute, a private non-profit organization that received funding from the Department of Justice.6

Previously, DOGE focused on federal government agencies or agencies that were chartered by Congress or had been appropriated funds by Congress. This new approach with The Vera Institute indicates that DOGE may seek to have direct oversight of any entity that receives federal funding whether by contract or grant. It is unclear what role DOGE seeks to have with recipients of federal funds. This situation continues to evolve and we are closely monitoring further developments.

OGC is keeping a close eye on all executive actions, agency memos and other activities that may impact our clients. As the challenges wind through the court system, we will see how these actions will be implemented and what the impact will be on companies, regardless of whether they receive federal funding or have historically been subject to direct federal oversight.

Footnotes

1 https://www.state.gov/secretary-of-state-marco-rubio-remarks-to-the-press-3/

2 As previously noted, the Office of Management and Budget (OMB) issued Memorandum M-25-13 on January 29, 2025, pausing funding for financial assistance programs that "may be implicated" by President Trump's recent Executive Orders. This memo was rescinded by Memorandum M-25-14, and it and the related EO's regarding funding pauses are currently subject to ongoing litigation.

3 https://www.epa.gov/newsreleases/epa-administrator-lee-zeldin-cancels-20-grants-2nd-round-cuts-doge-saving-americans

4 It should be noted that there is also an executive order Directing the Repeal of Unlawful Regulations, providing that various "unlawful" federal regulations be reviewed and repealed without notice and comment where consistent with the "good cause" exception.

5 https://www.whitehouse.gov/presidential-actions/2025/01/establishing-and-implementing-the-presidents-department-of-government-efficiency/

6 https://www.reuters.com/world/us/doge-attempted-assign-team-us-nonprofit-group-vera-institute-justice-2025-04-16/

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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