At-a-Glance
The U.S. government officially entered a partial shutdown on January 31, 2026.
It's clear our government is mismanaged, but what does that mean for you and your student loans?
There have been 20 "funding gaps" and 5 full government shutdowns in the last 50 years. The last shutdown happened in September and October 2025 - just three months ago.
For short government shutdowns (which might last the weekend or a few days into the week), nothing. For longer shutdowns (like we saw in 2013 or 2018), all the good stuff our government offers - like national parks, military death benefits, etc - stop, but all the "bad stuff" our government does, like collect taxes, and deal with student loans, keeps on keepin' on.
The Department of Education has a detailed government shutdown contingency plan (PDF File) because this happens. This was just released as of September 28, 2025 for the last shutdown, and we assume the same plan will happen in 2026.
If you're curious about how the government shutdown will affect your investments, check out this article. However, one area that has not been discussed at great length is the impact that this shutdown will have on your student loans.
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Student Loan Repayment
Whether or not the government shuts down does not change the fact that your student loan payments are due.
You student loans are handled by your loan servicer (such as MOHELA, Aidvantage, EdFinancial, and NelNet). These companies already have contacts that were appropriated and do not rely on the funding measures in Congress. As such, they will continue to operate normally (whether you appreciate that or not).
⚠︎ SAVE Plan Administrative Forbearance
If you're currently in an administrative forbearance due to the ongoing SAVE Plan litigation, you won't have to resume payments as long as you're in forbearance - which we're seeing extended. Watch for notices from your loan servicer for updates.
What's Not Impacted
The good news is that the shutdown will likely not affect your eligibility to qualify for any new federal financial aid. This would include any Federal Pell Grant, FSEOG, or Direct student loans. That specific pot of money is still flowing since it relies on existing approved funding. Your FAFSA will still be processed, and almost all of the Department of Education financial aid websites are still up and running.
More good news (well . . . "good" is a relative term here) is that Federal student loan servicers are still up and running. So you can still make all of your student loan payments and receive customer service if you have questions.
The loan servicers also handle IDR applications - so if you need to change your repayment plan (such as leaving the SAVE forbearance), this will still be processed.
Since 2009, the Department of Education contracted with private loan servicer companies to manage the repayment of most Federal student loans, and since these private companies don't specifically fall under the wings of the Federal government, they are still functioning as normal. So yes, your student loan payments are still due.
"Yes, your student loan payments are still due."
Because the contracted student loan servicers are still operational, this means that you can still apply for a deferment or forbearance. These contractors have the authority to approve these options, so they can still assist you with that. They can also help you change your student loan repayment plan, discuss loan forgiveness options, and work on processing PSLF ECFs.
However, some backend support for these contractors may be impacted by the shutdown, delaying customer service issues.
The key is that distribution of existing and new loans, and maintaining loan servicing are still going to continue.
If you are applying for a loan discharge due to medical disability or for student loan forgiveness due to teaching in a critical needs area, you are out of luck. You will hit a brick wall until the government is back up and running. Please see below for the bad news.
Bad News: What Will Be Impacted
While financial aid is still flowing, but there are some things that will stop until the government is back up and running. Specifically, anything that requires an employee directly at the Department of Education (versus a loan servicer) will likely be held up.
The current contingency plan says that roughly 87% of the Department of Education's staff would be furloughed the first week. That means delays will inevitably happen for anything that requires FSA ED staff. This equates to only 330 individuals working, out of 2,447.
The only excepted staff would be IT, finance, and specific law enforcement and fraud protection officers - along with the skeleton crew of individuals in Federal Student Aid.
Consolidation loan applications will go on hold. If you have a pending loan consolidation application through MOHELA or another servicer, it likely won't be completed. If you hit 120 payments for PSLF, that will also pause. However, the impact may be minor since it typically is taking 30-60 days anyways to process final approvals after you hit 120.
The reason? The Department of Education handles some of the logistics on loan consolidations and gives the final approval on loan forgiveness applications.
If you have specific questions about your federal financial aid, you won't be able to get any customer service through the Department of Education. The ombudsman office is also shut down, so if you have a complaint or grievance, you will have to wait until they open back up to file that. However, just because the federal government is shutdown, your state may have an ombudsman that can help.
More bad news is that delinquent loans are still being reported to credit bureaus and loans can still be turned over to student loan collection agencies. Credit bureaus are independent agencies, and are also not affected by the government shutdown.
Potential Future Issues With FAFSA
If the government shutdown lasts more than a few days, it could also impact FAFSA. While a lot of the FAFSA processing is automated, staff members are involved to resolve issues.
Furthermore, the FAFSA customer service center will also likely shutdown if the government shuts down, and so any families with support needs may not get answers.
Same is true for colleges. If any colleges are needing support with issues, they will have to wait as well - which could create a backlog.
This also will be compounded by the layoffs impacting the Department of Education.
Why You Should Care
Unfortunately, the longer that this government shutdown lasts, the larger the backlog of work will get. When federal workers return, they will be faced with an almost insurmountable hurdle to cross. The piles of paperwork and the backlog of work will likely be crippling. If this shutdown lasts for a long time, it could impact the availability of financial aid next year.
The Department of Education is already facing a massive IDR application and PSLF buyback backlog. This will only make things worse.
Now is the time to contact your Congressperson and express concern if you rely on any of these services.
Frequently Asked Questions About a Government Shutdown and Student Loans
Will I still have to make my student loan payments during a shutdown?
Yes. Loan servicers like MOHELA, Aidvantage, and NelNet are private contractors funded outside annual appropriations. Your payments remain due even if the Department of Education staff are furloughed.
What happens to Pell Grants and Direct Loans during a shutdown?
Pell Grants and Federal Direct Student Loans continue because they are funded through mandatory and advance appropriations. However, if the shutdown is extended, students and schools could experience delays due to limited Department staffing.
Will Public Service Loan Forgiveness (PSLF) applications be processed?
PSLF employment certification forms will continue to be processed (since this is handled by a contractor), but actual forgiveness for borrowers who reach 120 qualifying payments will be paused since this requires an actual ED staffer to approve.
Will FAFSA processing stop?
No. FAFSA applications continue to be accepted and processed by automated systems. But with most Department staff furloughed, students may experience backlogs, slower issue resolution, and limited support.
What happens to the Federal Student Aid Ombudsman office?
The Ombudsman’s office, which handles borrower disputes, is closed during a government shutdown. Borrowers won’t be able to escalate complaints until normal operations resume.
Does a shutdown affect colleges and schools?
Not directly. While core student aid continues, federal funding to colleges, universities, vocational rehab agencies, and K-12 districts may be delayed. Institutions that rely heavily on federal funds could face cash flow disruptions.
Is my loan information secure during a shutdown?
Yes. Cybersecurity, fraud monitoring, and other activities necessary to protect federal systems and property continue to operate during a government shutdown.
What if the shutdown lasts more than a week?
The Department of Education adjusts staffing as needed, but prolonged shutdowns increase the risk of delays in loan disbursements, FAFSA processing, and institutional funding.
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Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.