A federal government shutdown means a temporary halt in funding for many government agencies, but it does not stop your loan obligations.1 The core message for all borrowers is simple: Keep making your payments.2
Here is a simple, clear guide to what continues, what stops, and what you should do to protect your loans.
What Continues During a Shutdown
These essential operations are generally funded outside of the yearly appropriations process and are expected to continue:3
| Operation | Why it Continues |
| Loan Payments | You are still legally required to make all monthly federal student loan payments on time. Interest continues to accrue normally. |
| Loan Servicing | Loan servicers (like MOHELA, Nelnet, etc.) are private contractors, and their day-to-day work (processing payments, managing accounts) continues. |
| Federal Aid Disbursement | Pell Grants and Federal Direct Student Loans are expected to continue being disbursed to enrolled students because they rely on mandatory or carryover funding. |
| FAFSA Processing | The processing of the Free Application for Federal Student Aid (FAFSA) is generally expected to continue, though delays are possible. |
Important: If you miss a payment, the loan servicer can still report it as delinquent to credit bureaus.4
The biggest risk during a shutdown is the severe reduction in staff at the Department of Education (ED) and the Office of Federal Student Aid (FSA).5 The vast majority of FSA employees are typically furloughed.6
| Service | Potential Impact |
| Customer Support | Severe difficulty reaching ED/FSA staff to resolve complex issues or complaints that your servicer can’t handle. Call centers may have limited or no capacity. |
| Loan Forgiveness | Processing of applications for programs like Public Service Loan Forgiveness (PSLF) and teacher loan forgiveness will likely be delayed. |
| IDR Recertifications | Processing of Income-Driven Repayment (IDR) plan applications, annual recertifications, or adjustments to payment plans may be delayed. |
| Regulatory Decisions | Any new rules, guidance, or regulations related to student loans could be paused. |
3 Essential Steps to Take Right Now
To minimize your risk and protect your loan status during a shutdown, take these actions immediately:
1. Verify & Document Everything 📄
- Download & Save: Log into your loan servicer’s website and download your most recent statements, payment history, and any records showing your progress toward forgiveness (like PSLF forms).7
- Get Contact Info: Confirm the phone number and mailing address for your specific loan servicer.8
2. Set Up Auto-Pay (If Possible) ⚙️
- If you haven’t already, enroll in auto-debit payments.9 This is the best way to ensure your payments are made on time and prevents late fees or hits to your credit score, even if servicer websites or customer lines are overwhelmed.
3. Submit Pending Applications (FAFSA, PSLF) Now ⏳
- If you are a student planning to file the FAFSA or a borrower applying for a forgiveness program like PSLF or an IDR plan, submit the required forms as soon as possible to get your application into the system before potential processing backlogs worsen.10