Implications for Higher Education During a Federal Government Shutdown

Updated 9/30/23: A few hours before the October 1 deadline, Congress reached a stop-gap deal to fund the government for 45 days. Federal agencies, including the Department of Education, will continue operating with current funding levels until November 17. Failure to reach an agreement by mid-November could once again bring the threat of a government shutdown to the forefront. 

The federal fiscal year begins on October 1 each year, but without an approved budget from Congress—or a temporary budget—the federal government would have shut down after midnight on Saturday.

For colleges and universities, a brief shutdown likely will cause near-term inconveniences. However, a federal government closure of a longer duration could prove more problematic as backlogs in service needs and requests are likely to occur. In the past 10 years, there have been three shutdowns or partial shutdowns.

Here is what we anticipate if the government shuts down.

Student Aid

The administration of federal student aid should continue in a close-to-normal manner.  FAFSA processing, disbursing Pell Grants and federal direct student loans, and servicing federal student loans will continue under the Department of Education’s contingency plans.

ED also has confirmed that plans to resume collection of student loans will continue regardless of a shutdown.

What is in question, however, is how the shutdown would impact ED’s progress on the rollout of the 2024-25 FAFSA and numerous other rulemaking efforts that are underway.

Research

Colleges and universities that have received federal grants can continue to perform work under those awards. However, assistance or issuance of new grants or contracts from federal agencies will be delayed.

Research collaborations with federal agencies that rely on federal facilities, such as laboratories, likely will face more serious disruptions.

Other Federal Agencies

During a shutdown, each federal agency will operate under its designated contingency plan. Many agencies will keep open operations that were funded in the previous fiscal years or that are deemed essential. For example, embassies abroad will continue to provide consular services, and air traffic controllers will continue to work. In general, federal operations continue if they are—

• Necessary for national security or for security of people and property
• Permanent programs (e.g., Social Security benefit payments and veterans’ benefit payments)
• Programs with multi-year funding, have independent sources of funding, or have staff funded by user fees

Additional information is available here from the American Council on Education, and the Council on Governmental Relations has posted this guidance on award management. NACUBO will continue to follow negotiations in Congress as they work to agree on a budget.