The longer the federal government shutdown lasts, the more challenging it becomes for local school districts, universities, and federal education departments to function effectively.
Initially, many in the education sector have managed to cushion themselves against the worst effects of the shutdown, as funds were already set aside for summer and for October 1st. But if lawmakers take too long to negotiate on aspects like healthcare and other priorities, the situation could deteriorate.
Let’s explore how the shutdown impacts the education sector, student loan borrowing, and other related areas.
Education Department
The education department has quickly furloughed about 95% of its workforce, excluding those at the Federal Student Aid Agency.
In its contingency plan, the department indicated it would maintain essential services during the first week, which includes student aid payments as well as funding under Title I and the Disability Act.
However, new grantmaking activities will be paused. Additionally, civil rights investigations and various regulatory actions will also come to a halt. This plan only covers the initial week of the shutdown; prolonged closures will necessitate revised guidance, since the longest previous shutdown lasted 35 days.
Many supporters are growing concerned about the consequences that could follow the shutdown, especially given the Trump administration’s hints at wanting to leverage shutdowns for further budget cuts.
Earlier this year, the Education Department had already reduced its workforce from 4,000 employees, raising concerns that the president’s ultimate aim might be to eliminate federal agencies altogether.
Student Loan Borrowers
As stated by faculty, student loans and Pell grants will remain unaffected at the onset of the shutdown, as their funding is both already secure and mandatory.
“Major contracts and thousands of contracted staff are pre-funded to handle and manage student loans, and borrowers are expected to continue repayments throughout the shutdown,” according to the plan.
“The necessary resources are available to ensure payments, Pell grants, and student loan processes continue, including support for the FSA and related firms.”
However, other efforts related to changes in the student loan system, which were implemented by Republicans this year, could face delays due to the shutdown.
FAFSA
The Free Application for Federal Student Aid (FAFSA), scheduled for release on October 1st, was actually launched a week early to sidestep the initial phases of the shutdown.
Like student loans, the main operations of FAFSA are already funded, allowing these to continue despite a limited staff.
Students can still fill out the form, and applications will be processed as normal.
According to the education department, as of last Friday, 125,000 individuals were already working on their applications.
“Another win for the Trump administration! This week marked the earliest FAFSA launch ever, with over 125,000 students beginning their applications!” a division posted on X.
K-12 Schools and Higher Education
Most K-12 schools are largely unaffected by the start of the shutdown, mainly because funds have already been allocated and are available to school officials.
Nonetheless, some schools located on tax-exempt lands, such as those in Native American reservations, depend on impact aid, which has been halted due to the shutdown.
“We anticipate that the state or school won’t feel a direct impact, considering the funds have already been allocated. The department indicates it will keep fulfilling its usual financial commitments, typically due by October 1st.”
With long-term shutdowns, the effect on schools will vary based on how reliant the districts are on federal funding. Some districts reportedly receive around 15% of their budget from the federal government.
For higher education, institutions with already designated funds can continue their operations, but new research grant approvals will not occur during this time.
