How the government shutdown will affect student loans, FAFSA and the Education Department

WASHINGTON (AP) — Already diminished by cuts by the Trump administration, the U.S. Education Department will see more of its work come to a halt due to the government shutdown.

The department says many of its core operations will continue during the shutdown, which began at midnight Wednesday. Federal financial aid will keep flowing, and student loan payments will still be due. But investigations into civil rights complaints will stop, and the department will not issue new federal grants. About 87% of its workforce will be furloughed, according to a department contingency plan.

Since he took office, President Donald Trump has called for the dismantling of the Education Department, saying it has been overrun by liberal thinking. Agency leaders have been making plans to parcel out its operations to other departments, and in July the Supreme Court upheld mass layoffs that halved the department's staff.

In a shutdown, the Republican administration has suggested federal agencies could see more positions eliminated entirely. In past shutdowns, furloughed employees were brought back once Congress restored federal funding. This time, the White House’s Office of Management and Budget has threatened the mass firing of federal workers.

Appearing before the House Appropriations Committee in May, Education Secretary Linda McMahon suggested this year's layoffs had made her department lean — even too lean in some cases. Some staffers were brought back, she said, after officials found that the cuts went too deep.

“You hope that you’re just cutting fat. Sometimes you cut a little muscle, and you realize it as you’re continuing your programs, and you can bring people back to do that,” McMahon said. The department had about 4,100 employees when Trump took office in January. It now has about 2,500.

Here is what the department does and how a shutdown is expected to affect that work.

One of the department's major roles is management of the $1.6 trillion federal student loan portfolio. Student aid will be largely unaffected in the short term, according to the department's shutdown contingency plan. Pell Grants and federal loans will continue to be disbursed, and student loan borrowers must continue making payments on their debts.

About 9.9 million students receive some form of federal aid, spread across some 5,400 colleges, according to the department. Within the Office of Federal Student Aid, the department plans to furlough 632 of the 747 employees during the shutdown, although it didn't say which ones. For most student loan issues, borrowers work with loan servicers hired by the department rather than directly with FSA staff.

The department will also continue to process the Free Application for Federal Student Aid, or FAFSA, which is a key piece of how colleges and universities provide aid packages to incoming students. Certain employees involved with rulemaking around changes to student loans, part of the “One Big Beautiful Bill” passed by Republicans, also will be kept on to meet deadlines set by legislation.

While American schools are funded primarily by state and local money, the Education Department serves as a conduit for billions of dollars of federal aid going to state and local education agencies. During the shutdown, the department will cease new grantmaking activity and pause its advisory and regulatory role to schools and grant recipients.

But because most federal grants to schools were made over the summer, the department says it would expect minimal disruption to school districts and other grant recipients. Title I money, which goes to schools with high concentrations of students in poverty, plus funding for the Individuals with Disabilities Education Act would continue during a shutdown.

Not all federal education money arrives ahead of the school year, however. One example is Impact Aid, a program that bolsters school budgets in areas where federal land management or other activities, such as military installations, reduce the amount of taxable land to generate revenue for the district. These schools likely will see disruptions in payments. More than 1,200 districts receive that aid across all 50 states, according to a national association that represents those schools.

If the shutdown lasts longer than a week, the department says it would revise its contingency plan to prevent significant disruptions to school districts.

Under the shutdown, the department will stop its investigations into schools and universities over alleged civil rights violations.

Since the mass layoffs in March, the office has operated under a significantly reduced footprint. The department's civil rights branch lost about half of its staff. The cuts raised questions about whether the office would be able to shrink a backlog of complaints from students who allege they have experienced discrimination on the basis of race, sex or disability status.

The department's own data has shown a decline in resolving civil rights cases, while new complaints from families have increased. During the shutdown, work on the pending cases will stop.

One major federal education program is not part of McMahon’s department: the preschool program Head Start, which is overseen by the Department of Health and Human Services.

Head Start will be mostly unscathed by a federal shutdown, at least in the short term, said Tommy Sheridan of the National Head Start Association. Nearly all Head Start preschools already were approved for funding for the fall and beyond.

But eight centers nationwide, serving around 7,500 children, will lose their federal money this month while the government is shut down. At least four, located in Florida, have enough funding from other sources to carry them to November, said Wanda Minick of the Florida Head Start Association.

If the shutdown extends longer than a month, more centers would find themselves in the same situation. Head Start serves hundreds of thousands of young children from low-income households. Many parents cannot afford child care without it, meaning a disruption could keep adults from school or work.

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AP Education Writers Collin Binkley and Moriah Balingit contributed to this report.

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