Well, it happened. The federal government officially shut down at midnight on Oct. 1 after Congress failed to reach a budget deal, forcing agencies to furlough large portions of what they deem “non-essential” government functions. This leaves many in the country scrambling to figure out what happens next.
At the center of the fight is healthcare — Democrats are trying to extend Affordable Care Act subsidies, while Republicans want tighter restrictions on undocumented immigrant health benefits (and to require 80 hours of work or volunteer service a month to qualify). But for many young people, there’s another, possibly equally pressing issue this has them concerned about: How is the government shutdown affecting financial aid, such as the FAFSA and student loans?
Here’s what’s known so far: This current government shutdown has caused the Department of Education to furlough 95% of non-Federal Student Aid staff, along with 85% of the staff in the Office of Federal Student Aid. Furloughed employees are placed on temporary unpaid leave, meaning most department operations are now running with only a fraction of their normal staff. So what does all of this mean for college students?
As of Oct. 2, the essentials are still running. Pell Grants and Federal Direct Student loans will continue to be disbursed. The FAFSA, also known as the Free Applications for Federal Student Aid, will also continue to be processed. FAFSA is backed by permanent and multi-year appropriations, so they aren’t connected to the current budget war. Similarly, students and former students are still required to make their regular loan payments. If you use private student loans or a service that acts independently, then you should not be affected by the government shutdown at all.Â
If the shutdown runs on longer, like it has done in the past (2018-2019’s shutdown lasted 35 days, making it the longest government shutdown in U.S. history), we may see issues start to pile up. For starters, while most education grants were issued over the summer, new grantmaking is on hold. Even more concerning, with the amount of staff left in office at the Department of Education, it will become harder to process forgiveness and cancellation applications, address loan disputes, and oversee servicers. Persis Yu, Deputy Executive Director and Managing Counsel at the Student Borrower Protection Center told USA Today, “Document everything. If and when things go wrong, that will be vitally important.”Â
For the time being, it’s important to pay attention to the studentaid.gov website in case there are any changes students need to be aware of. The longer the shutdown continues, the more pressure falls on the small group of staff still working, leaving the system strained and students vulnerable to slower services. For now, your financial aid is safe, but if Congress doesn’t strike a deal soon, then students will be stuck waiting.Â