With Congress deadlocked over a temporary funding bill and the House out of session, a federal government shutdown could begin at 12:01 a.m. on Oct. 1, the start of the new fiscal year. While brief shutdowns historically have limited direct effects on colleges and universities, this one would arrive amid broader uncertainty about federal education programs, research funding, and the role of executive authority in determining spending priorities.
At the heart of the stalemate is a larger battle over spending authority and executive overreach, not just a policy disagreement over health care. As The Washington Post reports, Democratic and Republican leaders remain at odds over whether to pair a continuing resolution with expanded health care subsidies, including funding for Affordable Care Act tax credits and Medicaid.
Republicans are backing a stopgap bill that would extend current funding levels through Nov. 21 without additional policy provisions. Democrats counter that the bill ignores critical programs and undermines congressional control over spending, especially after President Trump’s administration used its July budget reconciliation law—the One Big Beautiful Bill—to channel mandatory funding toward its own priorities. The White House has signaled that programs outside that bill may see deep cuts, including layoffs, if no deal is reached.
The Department of Education
Last week, the Office of Management and Budget (OMB) issued guidance encouraging agencies to begin reductions in force during a shutdown, raising the stakes for federal employees and creating additional uncertainty.
According to the shutdown contingency plan Education Secretary Linda McMahon submitted to OMB on Sept. 28, the Department of Education (ED) will furlough approximately 95 percent of its non-Office of Federal Student Aid staff during the first week of a lapse in appropriations, retaining just 122 employees to maintain essential operations.
Student aid and loan servicing: Because most federal aid is distributed at the start of the academic term, midsemester shutdowns typically have limited immediate effect on aid recipients. The ED memo confirmed that Pell and Direct Loan disbursements will continue, and states will have access to Title I and IDEA funds as usual.
However, borrowers seeking assistance from ED may face delays, and loan forgiveness applications could be impacted if the shutdown persists. Federal student loan servicing will remain in place, with borrowers still required to make payments.
Rulemaking and regulation: The department is facing a tight timeline to finalize new regulations before the July 1, 2026, implementation deadline outlined in H.R. 1, including graduate loan caps and a simplified income-driven repayment plan. ED’s contingency plan states that some staff may be retained during the shutdown to meet those deadlines. This includes work on new student loan repayment plans and loan limits mandated by the law.
Negotiated rulemaking began Monday as scheduled, but a shutdown could disrupt the process. Initially, ED told committee members the week’s remaining sessions would be delayed and resume virtually Oct. 15–17 if the government shuts down. However, Deputy Assistant Secretary Jeffrey Andrade later said the department might be able to continue in person through the week, according to Inside Higher Ed.
Civil rights enforcement: ED’s Office for Civil Rights will suspend its reviews and investigations of complaints during the lapse.
Delayed support and communication: Across agencies, shutdowns limit access to public-facing services, data systems, and technical assistance. During previous shutdowns, users were unable to access tools like the Integrated Postsecondary Education Data System (IPEDS), and email or phone responses from agency staff were halted.
Research Funding and Grant Support
During a government shutdown, agencies such as the National Science Foundation and National Institutes of Health generally pause new grant awards, proposal reviews, and program launches. Institutions with existing federal research awards may still be able to draw down previously obligated funds, but technical assistance, progress reviews, and application processing are typically suspended.
According to a Sept. 23 analysis by the American Association for the Advancement of Science (AAAS), most federal research staff and grant managers are classified as nonessential and furloughed, resulting in delays that can extend well beyond the shutdown itself. Past shutdowns have led to cancellations of reserved time on national lab instruments, closures of field research sites on federal lands, and delays in international collaborations and contract renewals.
Also, as AAAS warns, repeated shutdowns weaken the long-term competitiveness of U.S. research by contributing to workforce attrition, loss of institutional knowledge, and overall erosion of the federal R&D infrastructure.
Veteran Benefits and GI Bill Processing
For veteran students, most GI Bill benefits are expected to continue without interruption. The Department of Veterans Affairs’ (VA) 2025 contingency plan confirms that education benefit payments and claims processing will continue, as these programs are funded through mandatory and advance appropriations (money Congress approves one year for use in the next). In addition, most certifications are submitted in August and have already been processed for the current academic term.
However, some delays could arise if the shutdown is prolonged or if students require additional verification, corrections, or appeals during the lapse. In previous shutdowns, VA has experienced backlogs in claims processing and a slowdown in support services due to furloughed staff and reduced system capacity.
While core benefits and payments are protected, call center support—including the GI Bill hotline—is suspended, and technical assistance may be limited. Appeals processing will continue, but students may experience slower response times if issues arise.
International Students and Visa Services
For international students, the immediate impact of a government shutdown is expected to be limited. No disruptions to visa eligibility or legal status are anticipated, but students should plan ahead in case federal communication channels are delayed or unavailable.
According to the State Department’s contingency plan, U.S. embassies and consulates will continue processing student visas (F-1, J-1) as long as consular services remain funded by visa fees. However, delays in appointments or case processing are possible, particularly at high-volume posts or if the shutdown is prolonged.
Within the United States, the Student and Exchange Visitor Information System will remain operational, and institutions must continue meeting reporting requirements. Still, students navigating travel, documentation, or status changes may experience slower response times from federal agencies.
Looking Ahead
While short-term shutdowns are often absorbed by higher education institutions with minimal disruption, the longer a shutdown continues, the greater the potential for cascading effects, including regulatory delays, research slowdowns, grant processing backlogs, and limited access to key support systems.