Federal Government Shutdown Update (2025)
The federal government entered a shutdown as of 12:01 AM on October 1, 2025. SAN and WCET are closely monitoring what this means for the higher education digital learning community. In this update, we provide an overview of what we currently know and its implications for higher education.
Please note that this update should not be considered to be or used as legal advice. Legal questions should be directed to legal counsel.
What We Know
The government shut down at 12:01 a.m., October 1st, after Congress was unable to reach a compromise between Republicans and Democrats.
In the past, a shutdown was sometimes avoided or resolved through a Continuing Resolution (CR) that allowed for short-term funding until a final budget deal could be resolved. The House passed what is known as a “clean” continuing resolution. This means that most government agencies will keep their same funding levels, with the exception of an additional $88 million for enhanced security for Congress, the executive branch, and the Supreme Court. This short-term funding measure would have expired on November 21st.
The Republican CR failed to pass in the Senate, while the Democratic version of a CR that would extend Affordable Care Act insurance subsidies and roll back the Medicaid and other health care cuts found in the One Big Beautiful Bill Act also failed, largely along party lines.
What This Means for Higher Education
Department of Education and negotiated rulemaking:
The Department began a Negotiated Rulemaking this Monday, September 29th, with its Reimagining and Improving Student Education (RISE) committee. This committee is negotiating regulations associated with the changes to federal student loan programs found in the One Big Beautiful Bill Act. Negotiations, which are taking place in Washington, DC, are scheduled to continue through the end of the week. Because the rulemaking addresses appropriations related to the recent passage of a federal statute, the One Big Beautiful Bill, the rulemaking will continue as planned in person through the end of the week.
Department of Education and student financial aid:
Financial aid disbursement is unlikely to be impacted unless we experience a prolonged shutdown, since aid for the fall term has already been disbursed.
Student loan repayment is slated to continue regardless of the shutdown, although support and customer service will be affected.
87% of workers at the U.S. Department of Education are being placed on furlough. More specifically, it is reported that 95% of staff not working on federal student aid are furloughed.
Research and grant funding:
There will be no new awards, review of applications, or issue of new proposals during the shutdown.
IPEDS operations will likely be negatively affected as they are run by the National Center for Education Statistics (NCES), which will be affected by the funding lapse.
Veterans:
Benefit processing is expected to continue. However, the VA GI Bill hotline will be closed.
Other federal appropriation programs:
Students, especially those receiving federal assistance through WIC and other programs, will experience a disruption to the programs and payments, depending on how long the shutdown lasts. Although that money is usually paid retroactively after the shutdown ends, these are students (and possibly staff) who have no savings to live off of. Campus food banks and other resources may experience higher usage by both students and, potentially, staff.
Other potential ramifications:
It is likely that a shutdown will only be resolved through a Continuing Resolution. This will just buy time to address the huge difference in House and Senate budget priorities. It’s possible that we’ll be right back here with another shutdown before the end of the calendar year.
Unlike in previous years, the Office of Management and Budget (OMB) has suggested that agencies could fire many furloughed staff through a reduction-in-force (RIF). It is unclear at this time if the Department of Education plans to use a government shutdown as an opportunity to further reduce staffing.
Any shutdown may be prolonged. Speaker Johnson has extended the House’s recess through October 7th. This means that in order to end a shutdown, the Senate must pass the House CR but not its own CR, which might include compromises with Democrats.
Institutions that can only receive funding upon completion of required reports will see funding delays.
International students needing visas will likely be impacted. While U.S. embassies and consulates will continue to process visas, there may be delays.
After the shutdown ends, there will be a significant backlog of activity. Government response time will be negatively impacted for several weeks, if not months.
Remember, critical staff who continue to work during the shutdown are NOT being paid. In the past, this has led to slowdowns of essential activities.
Federal Agency 2025 Contingency Plans