David Thomas, the president of Morehouse College, said his office fielded a surge of calls this week from worried students and their families concerned the Trump Administration’s “federal funding freeze” would directly impact college access. 

The sudden scramble was “perhaps only rivaled by what happened in March of 2020 when we realized that the Covid pandemic was truly a threat,” Thomas told CNBC. He became president of Morehouse, one of the country’s top historically Black colleges and universities, or HBCUs, in 2018.

This freeze on federal aid “would create another existential threat as great as the pandemic,” he said.

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Thomas’ comments come amid ongoing confusion about how a freeze on federal grants and loans could potentially impact students and schools.

A Jan. 27 memo issued by the Office of Management and Budget, which would affect billions of dollars in aid, said the pause on federal grants and loans “does not include assistance provided directly to individuals.”

Although the memo was later rescinded, the White House said a “federal funding freeze” remains in “full force and effect.” It is currently on hold amid legal challenges.

Thomas, who is also on the Board of Trustees at Yale University, said college leaders across the country have spent the better part of the week focused on “the consequences of this action.” Morehouse immediately initiated a hiring freeze in preparation for a potentially significant financial disruption.

“All of the institutions are still in limbo,” he said.

Following the memo’s release, the Education Department announced that the freeze would not affect student loans or Pell Grants.

“The temporary pause does not impact Title I, IDEA, or other formula grants, nor does it apply to Federal Pell Grants and Direct Loans under Title IV [of the Higher Education Act],” Education Department spokesperson Madi Biedermann said in a statement.

In addition to the federal financial aid programs that fall under Title IV, Title I provides financial assistance to school districts with children from low-income families. The Individuals with Disabilities Education Act, or IDEA, provides funding for students with disabilities.

The funding pause “only applies to discretionary grants at the Department of Education,” Biedermann said. “These will be reviewed by Department leadership for alignment with Trump Administration priorities.”

But questions remain about other aid for college.

The freeze could affect federal work-study programs and the Federal Supplemental Educational Opportunity Grant, which are provided in bulk to colleges to provide to students, according to Kalman Chany, a financial aid consultant and author of The Princeton Review’s “Paying for College.”

The disruption to federally backed research funding also poses a threat to college programs and staff.

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The Trump administration emailed more than 2 million federal workers this week, giving them the option to resign now and get pay and benefits through Sept. 30.

Workers have until Feb. 6 to accept the “deferred resignation” offer.

The payouts come on the heels of President Donald Trump‘s executive order to end DEI programs. On Wednesday, he said federal workers need to return to the office five days a week “or be terminated.”

“We think a very substantial number of people will not show up to work, and therefore our government will get smaller and more efficient,” Trump said at the signing of an immigration detention law.

Experts advise federal employees to take their time before accepting the offer. By accepting the resignation, tenured federal employees could lose certain rights they may have.

“If you resign, it’s deemed voluntary,” said Michael L. Vogelsang, Jr., a principal of The Employment Law Group, P.C. “If you are a permanent, tenured employee in the government and the administration wants you out, laws still exist that federal employees cannot just be fired on a whim.”

Meanwhile, some lawmakers question whether the president can make this offer without Congressional approval.

Sen. Tim Kaine, D-Virginia, said federal employees should not be “fooled” by Trump’s proposal.

“If you accept that offer and resign, he’ll stiff you,” Kaine said. “He doesn’t have any authority to do this.” 

The Voluntary Separation Incentive Payment Authority gives federal agencies the authority to offer buyout incentives for some employees to resign or retire, but it is capped at $25,000.

Asked for more detail on the payouts, including what authority the president has to offer to pay through September 30, the White House referred back to its statement given on Tuesday.

“If they don’t want to work in the office and contribute to making America great again, then they are free to choose a different line of work and the Trump Administration will provide a very generous payout of eight months,” White House press secretary Karoline Leavitt said in a statement.

There is already uncertainty around current funding for the federal government. It’s operating under a short-term continuing resolution passed in December. Unless Congress acts, the federal government could shut down on March 14. 

Unlike with corporate buyouts, federal employees who received this offer can’t appeal for a better deal, experts say.

“Usually with buyouts, I think of more severance, and usually it’s sort of some kind of negotiation. This isn’t really negotiation. It’s sort of a unilateral offer,” Vogelsang said.

Still, some of the factors to consider for weighing the government’s deferred resignation offer are similar to what one would weigh in a corporate buyout, experts say:

Millions of families claim the child tax credit every year — and filing mistakes can delay the processing of your return and receipt of your refund, according to tax experts. 

For 2024 returns, the child tax credit is worth up to $2,000 per kid under age 17, and decreases once adjusted gross income exceeds $200,000 for single taxpayers or $400,000 for married couples filing jointly.  

The refundable portion, known as the additional child tax credit, or ACTC, is up to $1,700. Filers can claim the ACTC even without taxes owed, which often benefits lower earners.

However, a lower-income family who doesn’t know how to claim the credit “misses out on thousands of dollars,” National Taxpayer Advocate Erin Collins wrote in her annual report to Congress released in January. 

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More than 18 million filers claimed the additional child tax credit in 2022, according to the latest IRS estimates. 

By law, the IRS can’t issue ACTC refunds before mid-February. But the Where’s My Refund portal should have status updates by Feb. 22 for most early filers, according to the IRS.  

Here’s how to avoid common child tax credit mistakes that could further delay your refund.

To claim the child tax credit or ACTC, you must have a “qualifying child,” according to the IRS. The qualifying child guidelines include:

• Age: 17 years old at the end of the tax year
• Relationship: Your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister or a descendant of these
• Dependent status: Dependent on your tax return
• Filing status: Child is not filing jointly
• Residency: Lived with you for more than half the year
• Support: Didn’t pay for more than half of their living expenses
• Citizenship: U.S. citizen, U.S. national or a U.S. resident alien  
• Social Security number: Valid Social Security number by tax due date (including extensions) 

You may avoid some eligibility errors by filing via tax software or using a preparer versus filing a paper return on your own, O’Saben said. Tax software typically includes credit eligibility, which can minimize errors.

Typically, parents apply for a Social Security number in the hospital when completing their baby’s birth certificate. But it can take one to six weeks from application to receive that number, according to the agency, which can create time pressure for families with a new addition around tax season.

Filing a tax return and claiming the child tax credit before receiving the Social Security number is a mistake, O’Saben said.

“I have seen [the child tax credit] denied for people who have filed before they got the Social Security number for a dependent,” he said. “And there’s no going back.”

If you don’t have the number before the tax deadline, you should request an extension, which gives you six months more to file your return, O’Saben explained.

However, you still must pay taxes owed by the original deadline.