Could a government shutdown impact student loans? Here’s what to know.

Government Shutdown: How it Could Impact Student Loans

With a potential government shutdown looming, many federal activities are at risk of being disrupted. However, one area that will not see a break is student loan repayments. According to the U.S. Department of Education, borrowers will still be required to make payments on their outstanding student debt even if a shutdown occurs.

While borrowers will still need to fulfill their repayment obligations, there may be challenges in reaching someone at the Education Department for assistance. Most employees are expected to be furloughed in the event of a shutdown, potentially leaving borrowers with fewer resources to resolve any issues that may arise with their loan servicers.

For students currently enrolled in college or university programs, federal aid such as loans and grants are unlikely to be impacted as most payments are disbursed at the beginning of the academic year. However, those in the application process or seeking assistance from the Education Department may face delays if a shutdown occurs.

The Public Service Loan Forgiveness program, aimed at helping public workers discharge their federal student loans after serving in government or non-profit organizations for over 10 years, could be impacted by a shutdown. Additionally, income-driven repayment plans that provide forgiveness after 20-25 years of repayment may also face delays.

Approximately 2,100 of the Education Department’s 2,400 employees are expected to be furloughed in the event of a shutdown, including most of the Office of Federal Student Aid. Pell Grants, Federal Direct Student loans, and the FAFSA application process are expected to continue as they are funded through mandatory spending or carryover appropriations.

The Education Department plans to use permanent appropriations to process student aid requests through the FAFSA, which opened early for the 2026-27 academic year. Title I and IDEA grants for low-income schools and disabled students will also continue to be available, as will most GI Bill benefits for veteran students.

While new grants may be halted during a shutdown, most recipients have already received their awards over the summer, minimizing the impact. The Office for Civil Rights would pause its review and investigations of civil rights complaints during a shutdown.

In conclusion, while student loan repayments will continue, borrowers may face challenges in reaching the Education Department for assistance during a government shutdown. It is important for borrowers and students to stay informed and prepared for any potential disruptions that may arise.