What You Need to Know About the Government Shutdown
The Department of Education outlined contingency plans for FY 2026, in the event of a shutdown.
Our national partner NAICU has reviewed the Department’s contingency plan for FY2026. Below is a summary of what independent college and university leaders need to know about the implications for students, aid, and campus operations.
| Operation | Status During Shutdown | Broad Implications/Notes |
| Pell Grants, Direct Loans | Continue | Disbursements will proceed; students will receive aid and loan borrowers must continue repayment. |
| Campus-Based Aid (SEOG, FWS) | Drawdowns continue, no new awards | Institutions can continue drawing down previously awarded funds; students can be paid through existing awards. No new awards until funding resumes. |
| FAFSA Processing and Loan Servicing | Continue | Key systems and contracts are pre-funded, ensuring aid processing and servicing continues with minimal disruption. |
| Civil Rights Investigations | Paused | Reviews and investigations paused. Institutions may face delays in complaint resolution or technical guidance. |
| New Grantmaking for the Department’s Discretionary Programs | Shutdown | No new awards or competitions will proceed during the shutdown. However, most higher education programs are already awarded over the summer, limiting immediate impact. |
| Guidance, Technical Assistance, Regulatory Actions | Shutdown | Expect the responsiveness from the Department on issues related to technical guidance and direction to be lacking during a shutdown. |
| One Big Beautiful Bill Act Negotiated Rulemaking | Continue (limited staff) | Current rulemaking would be paused and reconvened virtually from October 15-17. |
| Contractor Work | Partial, Potential Delays | Some contracts will be allowed to continue if tied to aid delivery or system maintenance; others halted, with payments delayed until shutdown ends. |
Bottom Line
- Students will continue receiving Pell Grants and loans, and institutions will retain access to existing federal funds.
- The most noticeable effects will be delays in regulatory actions, oversight, and civil rights enforcement.
- Longer shutdowns increase the risk of slower responsiveness from the Department of Education, with only a small fraction of staff on duty.
NAICU and WAICU’s priority is to ensure that federal student aid continues to flow and that institutions can continue to support students without disruption.
For more information, email WAICU Executive Vice President for External Affairs Rebecca Larson.
