When the government gets shut down by funding shortfalls, it seems to be all people can talk about, but it can also be hard to know exactly what agencies are impacted. If you’ve been checking the news around student loans, for example, you may have heard that new regulations are still being enacted that will affect which organizations’ employees will be able to qualify for Public Service Loan Forgiveness. You may be thinking, “But wait a minute! I thought the government was shut down, how’s that possible?” Well, you’d be right to a degree, but the reality is a lot more complicated.
Although we use the phrase “government shutdown,” only certain agencies and programs are actually closed. Sometimes a certain percentage of employees might be furloughed within a certain department, or only those working on particular projects may have to keep working (without pay). Within the Department of Education, most of its already slim workforce were furloughed, but many who are covering student loans were still on the job. Negotiators responsible for policy revisions, like those recently enacted, or those related to the most recent government spending bill, continued to work in spite of the shutdown to satisfy congressionally mandated deadlines.
For borrowers, a government shutdown has little effect on their day-to-day student loan activity. Since student loan servicers handle the repayment side of the equation, things like monthly payments continue without interruption. (Two senators have introduced a bill, however, to pause loan payments for federal workers during a shutdown.) And although universities hold their breath during shutdowns, federal aid dispersals and FAFSA processing continue. And for those in repayment, loan consolidations, IDR plan applications, and PSLF payment counts are still processed. Throughout the shutdown, Federal Student Aid’s customer service also remained available, but with consistently questionable information.
If you have questions about your student loans—in a shutdown or anytime—give us a call. We’re here to give you up-to-date, accurate information and real numbers so that you have the full picture on your student loan journey.
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