December 14, 2018

Short-term government shutdown unlikely to affect financial aid

The government shutdown is unlikely to affect financial aid for students in the short-term, according to a report from the news website, Inside Higher Ed. Under the United States Education Department’s contingency plan, student aid will continue to be distributed and loans will continue to be serviced.

A prolonged shutdown, however, could shudder the cash flow from the government to colleges receiving federal grants. A long-term shutdown could also delay financial aid awards for next fall.

Last week, 4,225 employees of the Education Department were furloughed because of the shutdown. Those furloughed employees represent more than 90 percent of the department’s workforce. A majority of those employees are student aid processors and this week, only 6 percent, or approximately 240, will report back to work. The decreased workforce will lengthen the processing time of the Free Application for Federal Student Aid and the awarding of financial aid could be delayed.

Likewise, if Congress does not raise the debt ceiling on Oct. 17, students’ financial aid could be affected adversely. If the United States is no longer allowed to borrow money, the government will need to decide which of the country’s bills it will pay. Higher education advocates warn federal student aid may bea low priority,  and aid disbursements could be delayed.

 

Reporting by Dan Bauman

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