Gov’t Shutdown Slows Funding, Won’t Affect Financial Aid or Repayment

The United States federal government has officially shut down as talks over a budget deal stalled beyond the deadline. As a result, the U.S. Department of Education, has halted operations and the majority of employees from the department are furloughed.

According the Department of Education’s contingency plan, federal financial aid operations will not be affected from the government’s closure. As a result of the shutdown, more than 90% of the Education Department’s 4,225 total employees are furloughed. Employees who are responsible for all things concerning federal financial aid and those who are charged with the protection of life and property will continue to work, according to Emily Atteberry of USA Today.

Throughout the shutdown, the department’s website will not be updated, transactions will not be processed and inquiries will go unanswered. The majority of federal financial aid operations will continue with a “limited impact” to the FAFSA process, the delivery of aid and the repayment of student loans, the department said.

Pell Grants and federal direct student loans will continue to be allocated, as these funds come from permanent and multi-year funding. Race to the Top, Investing in Innovation and Promise Neighborhoods, however, only have enough funds to continue until Dec. 31.

There is no way of predicting how long the government shutdown will last. If the shutdown continues past a week, the department expects it will be even harder to continue essential operations, and the percentage of those reporting to work would drop down to 6%, the department said.

The shutdown’s impact on public education is still unknown, though it would certainly “severely curtail the cash flow to school districts, colleges and universities.” Up to 20% of some school districts’ funding comes solely from the Education Department’s funds.

Higher education could be more drastically affected by the government shutdown than expected, according to Molly Greenberg of In The Capital:

“Even if only for a temporary amount of time, universities risk the threat of further cuts to funding for some financial aid programs and scientific research.”

The shutdown will close the majority of operations at the National Institutes of Health (NIH), which is the biggest supplier of federal money for research at universities across the country. Research at NIH’s main headquarters in Bethesda, Maryland, is also due to be put on hold, including medical trials since no new patients will be able to be accepted, according to the Department of Health and Human Service’s contingency plans.

Thankfully the agency just finished off one of its grant award cycles, so researchers don’t have to fear losing out on funding from the NIH at the moment. The next round of grant applications aren’t due until October 5, with awards not expected to be given out until December or January, according to Carrie D. Wolinetz, president of United for Medical Research, which should leave enough time for officials to catch up and ensure applications are reviewed in time for the deadline. As of right now, though, the agency will “not take any actions on grant applications or awards.”