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Government Shutdown and Student Loans Explained
It seems more likely that we will see a government shutdown on October 1. 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 4 full government shutdowns in the last 50 years. The last shutdown happened in December 2018 and January 2019. But the threat of a shutdown seems to loom every budget cycle.
Well, it really depends on what happens. 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.
In fact, the Department of Education has a detailed government shutdown contingency plan (PDF File) because this happens often enough. This is from the last potential shutdown, but we would expect a similar plan this year.
As of right now, the last day that the government is funded through is September 30, 2025. So the earliest the government would shut down is October 1, 2025. As of today, it appears this might happen.
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.
Published on 6 days, 9 hours ago