Introduction to Government Shutdown and Student Loans
The U.S. Education Department, already impacted by cuts under the Trump administration, will experience additional disruptions due to the government shutdown. The department has announced that many of its core operations will continue during the shutdown, including the disbursement of federal financial aid and the collection of student loan payments. However, investigations into civil rights complaints will be halted, and new federal grants will not be issued. Approximately 87% of the department’s workforce will be furloughed, according to a contingency plan.
Impact on Federal Student Loans
Federal student loans, which are managed by the Education Department, will be largely unaffected in the short term. Pell Grants and federal loans will continue to be disbursed, and student loan borrowers will still be required to make payments on their debts. About 9.9 million students receive some form of federal aid, spread across approximately 5,400 colleges. The department plans to furlough 632 of the 747 employees within the Office of Federal Student Aid during the shutdown. For most student loan issues, borrowers work with loan servicers hired by the department rather than directly with FSA staff.
The department will also continue to process the Free Application for Federal Student Aid (FAFSA), a crucial component of how colleges and universities provide aid packages to incoming students. Certain employees involved in rulemaking around changes to student loans will be kept on to meet deadlines set by legislation.
Effects on Money for Schools
While American schools are primarily funded by state and local money, the Education Department serves as a conduit for billions of dollars in federal aid to state and local education agencies. During the shutdown, the department will cease new grantmaking activity and pause its advisory and regulatory role to schools and grant recipients. However, because most federal grants to schools were made over the summer, the department expects minimal disruption to school districts and other grant recipients. Title I money, which goes to schools with high concentrations of students in poverty, and funding for the Individuals with Disabilities Education Act will continue during a shutdown.
Civil Rights Investigations Will Pause
Under the shutdown, the department will stop its investigations into schools and universities over alleged civil rights violations. The department’s civil rights branch has already operated under a significantly reduced footprint since the mass layoffs in March, losing about half of its staff. The cuts raised questions about whether the office would be able to shrink a backlog of complaints from students who allege they have experienced discrimination on the basis of race, sex, or disability status. The department’s own data has shown a decline in resolving civil rights cases, while new complaints from families have increased. During the shutdown, work on pending cases will stop.
Conclusion
The government shutdown will have significant effects on the operations of the U.S. Education Department, particularly in areas such as investigations into civil rights complaints and the issuance of new federal grants. However, federal student loans and the processing of FAFSA will continue, ensuring that students receive the financial aid they need. As the shutdown continues, it is essential for students, schools, and families to stay informed about how these changes may impact their financial aid and educational opportunities.
FAQs
- Q: Will federal student loans be affected by the government shutdown?
- A: Federal student loans will be largely unaffected in the short term, with Pell Grants and federal loans continuing to be disbursed, and student loan borrowers still required to make payments.
- Q: Will the processing of FAFSA be impacted by the shutdown?
- A: No, the department will continue to process the Free Application for Federal Student Aid (FAFSA) during the shutdown.
- Q: What happens to civil rights investigations during the shutdown?
- A: The department will stop its investigations into schools and universities over alleged civil rights violations during the shutdown.
- Q: How will the shutdown affect money for schools?
- A: The shutdown will cease new grantmaking activity, but most federal grants to schools were made over the summer, so minimal disruption to school districts and other grant recipients is expected.
