Government Shutdowns and Higher Education

Each fiscal year, Congress must pass—and the president must sign—legislation that funds the federal government. If they fail to meet the deadline, the government enters a funding gap and shuts down, with limited operations.

So how does a government shutdown impact both the country in general and higher education institutions specifically? (Note: this page was last updated Sept. 29, 2025.)

Background

To fully fund the government for the upcoming fiscal year, all 12 appropriations bills must be passed by Congress and signed by the president by October 1, the start of the new fiscal year. If Congress is unable to complete the appropriations process by October 1, it can enact a continuing resolution (CR), which approves funding—typically at the previous funding rate—for a set duration.

The start of the fiscal year was moved to October 1 in 1976. Since then, the government has enacted at least one CR in all but three years, and Congress has averaged five CRs per year since 1998. When the government fails to enact spending legislation by a set deadline, there is a funding gap.

Government Shutdown Overview

When there is a funding gap, the Antideficiency Act requires the government to cease operations, except for certain circumstances. Unless deemed excepted or essential, government employees are furloughed and instructed not to work, and nonessential government programs cease to operate.

The Office of Management and Budget (OMB), an executive office responsible for implementing the president's agenda, has broad authority during a shutdown to determine how the government functions and how government funding is spent. OMB directs agencies on how they must function and manage staff during a shutdown. Mandatory programs, such as Social Security and Medicare, largely continue to operate as usual during a shutdown. A partial shutdown occurs when the government enacts some, but not all, 12 appropriations bills.

While government shutdowns—especially lengthy ones—used to be rare, they have become more common. After averting funding gaps since 1996, the government shut down for 16 days in 2013. The government also shut down for two days in 2018 and partially shut down for 34 days—the longest shutdown in history—in 2018–19.

What Happens During a Government Shutdown?

OMB provides agencies with updated instructions on how to prepare for and operate during a shutdown. Using this guidance, agencies maintain and update contingency plans for potential shutdowns. These contingency plans include the activities that will and will not continue during a shutdown; how employees will be impacted during a shutdown; and an estimate for how long an agency needs to shut down and reopen, among other details.

As the likelihood of a shutdown increases, OMB and federal agencies will often release additional guidance and memoranda. For example, many agency contingency plans were updated in September 2023 in preparation for a shutdown, even though one never occurred. Once offices fully or partially shut down, they do not operate as usual until new funding is approved.

Broad Impact

Shutdowns can cause a wide array of short- and long-term disruptions, though the consequences are not uniform.

Some agencies and individuals are hit hard during a shutdown, while others might experience only minor inconveniences. Among the people most affected are government employees, many of whom are furloughed or required to work without pay until new funding is approved. During the most recent shutdown, effects included the suspension of some Environmental Protection Agency and Food and Drug Administration inspections, the closure of immigration courts, the halting of certain FBI operations, and delays in rental assistance and grant programs.

Brief shutdowns have relatively minor economic consequences. The Congressional Budget Office estimated that the 34-day partial shutdown across 2018 and 2019 cost the broader economy $11 billion and delayed about $18 billion in federal discretionary spending. Traditionally, shutdowns have not substantially affected financial markets. Other federal funding issues, such as breaching the debt limit, would likely be much more devasting.

Impact on Higher Education

Historically, institutions of higher education have experienced few negative effects from a short-term government shutdown. The impact depends on a variety of circumstances. Timing, for example, is a key variable: a government shutdown around the start of the academic year on July 1 would have the potential to cause more disruptions for colleges and universities than a shutdown occurring midsemester. An administration’s priorities during a shutdown—what functions pause, how gaps are filled—can determine the impact on each sector.

Shutdowns impact federal agencies differently, given that some agencies have more essential duties than others. The Department of Education (ED) would likely cease almost all operations during a shutdown. ED’s contingency plans, updated in September 2025, said that 87 percent of employees would be furloughed.

The impacts of a government shutdown often linger even after funding is restored. Returning employees need to address the various issues that piled up during the shutdown while also managing their regular responsibilities.

In higher education, a shutdown could affect several areas, including:

Research and Federal Grant Funding

Institutions that have already received grant funding should not face issues during a shutdown, yet they likely would not receive new grants or technical assistance from federal agencies. Previous instructions from the National Science Foundation noted that a short funding lapse resulted in “missed panels, a backlog of proposal actions, and delays that may result in the cancellation” of some research and related activities. In ED’s 2023 contingency plan, most employees involved in those grant programs would be furloughed. Research agencies typically cannot begin new programs, issue new grants, enter into new contracts, or review existing applications during a shutdown. Given the current administration’s policies toward federal research funding, support for research and grants are not likely to be priorities during a shutdown, increasing the risk of additional disruptions for institutions.

Veterans and Military Learners

Depending on which activities are deemed essential, student veterans may face delays in processing their Department of Veterans Affairs (VA) education benefits. The period for certifying VA education benefits generally starts in August, so most should have already been certified.

Department of Defense education assistance, such as Tuition Assistance (TA), may be more significantly impacted during a shutdown. Servicemembers who are currently enrolled in may see delays in TA reimbursements, depending on the length of the shutdown.

International Students

Some immigration services remain operational during a shutdown, but others do not. For the U.S. State Department, consular services remain operational—both domestically and abroad—as long as existing funds remain available. However, the U.S. Department of Homeland Security may not process applications for changes in status in a timely manner, as they will only carry out exempt activities such as law enforcement. For example, during the 2013 shutdown, H-1B visa applications were not reviewed.

Student Aid

Typically, student aid is not impacted by a shutdown. Because financial aid is disbursed at the beginning of the semester, it should already have been received if a midsemester shutdown happens. Because most aid programs are funded a year in advance, they should not be impacted by a short-term shutdown.

Most federal student aid operations are carried out by contractors, which should minimize disruptions during a shutdown. However, borrowers seeking direct assistance from the Department of Education (ED) will not be able to access it. Students applying for funding—including federal loans or loan forgiveness—could experience processing delays.

Regulations

The issuance of proposed and final rules, review of comments, and other regulatory actions could be delayed during a shutdown. For example, the upcoming negotiated rulemaking sessions could be impacted by a shutdown.

Government Support

Broadly speaking, the federal government cannot provide much assistance during a shutdown. Most government employees will not answer phone calls, respond to emails, or update resources. Other types of services will be paused as well. For example, in past shutdowns, users could not access the Integrated Postsecondary Education Data System. The longer a shutdown persists, the more issues pile up and the greater the risk of crises to arise caused by an understaffed government.