How the Federal Government Shutdown May Impact Federal Student Aid and Loan Repayment
As of October 1, 2025, the federal government has officially shut down due to a failure to reach a funding agreement. This development raises important questions for students and borrowers relying on federal financial aid and student loan services.
What You Need to Know
While many federal employees have been furloughed, key functions of the U.S. Department of Education will continue. However, due to reduced staffing, delays in processing and communication are likely. Here's how the shutdown may affect federal student aid and loan repayment:
Federal Student Aid
- Disbursements Will Continue
Federal Pell Grants, Federal Direct Student Loans, and other forms of aid will still be disbursed as scheduled.
- FAFSA Remains Available
The Free Application for Federal Student Aid (FAFSA) for both the 2025–26 and 2026–27 academic years is still open and being processed.
- What You Should Do
Families are strongly encouraged to submit FAFSA applications on time to meet upcoming deadlines, despite the shutdown.
- Payments Are Still Due
Borrowers in active repayment must continue making payments. Interest will continue to accrue during the shutdown.
- Applications Can Be Submitted, But Expect Delays
You may still submit applications for:
- Public Service Loan Forgiveness (PSLF)
- Income-driven repayment plans
- Loan consolidation
- Recommended Actions for Borrowers
- Track your repayment and forgiveness status closely.
- Save documentation in case of future discrepancies.
- Contact your federal loan servicer directly—servicer operations are not impacted by the shutdown.
