Shutdown's Impact on Student Loans and Aid
The U.S. Department of Education said in a Sept. 28 contingency plan that a government shutdown expected Oct. 1 would not suspend borrowers' obligation to make student‑loan payments and that mandatory‑funded programs—like Pell Grants, Federal Direct Loans, FAFSA processing and most GI Bill benefits—should continue. However, the Department warned many discretionary functions would be curtailed (about 2,100 DOE staff furloughed), potentially delaying borrower assistance, loan forgiveness reviews, new grants and casework that requires agency personnel.
Education
Government/Policy
🔍 Key Facts
- DOE contingency plan dated Sept. 28, 2025; FAFSA opened Sept. 24, 2025 for 2026–27
- About 2,100 of roughly 2,400 DOE employees expected to be furloughed during a shutdown
- More than 9.9 million students receive Pell Grants and loans; mandatory spending lets those disbursements continue
📍 Contextual Background
- Social Security benefits are funded through mandatory spending, meaning the program's funding is provided without an annual expiration and does not require yearly appropriations to continue benefit payments.
- The Social Security Administration's contingency plans provide that in the event of a lapse in appropriations the agency will follow those plans and beneficiaries would continue receiving Social Security, Social Security Disability Insurance (SSDI), and Supplemental Security Income (SSI) payments.
- The Government Employee Fair Treatment Act of 2019 provides that government employees automatically receive back pay after a government shutdown.
- Republicans and Democrats were engaged in negotiations over government funding ahead of an upcoming funding deadline described as occurring on a Tuesday.
- A Social Security Administration contingency plan published on Sept. 24 indicated that about 45,000 SSA employees (roughly 90% of the agency's workforce) would remain on the job during a government shutdown, while roughly 6,200 employees would be furloughed.
- During a U.S. federal government shutdown, active-duty military personnel and deployed National Guard members must continue to perform their assigned duties but their pay is delayed until the shutdown ends.
- Civilian personnel whose work the Department of Defense designates as 'excepted' continue to work during a government shutdown, while other Department of Defense civilian employees are furloughed.