How the Government Shutdown Could Impact Student Loan Borrowers
- Melissa Maguire
- Oct 15
- 2 min read
Updated: Oct 15
As of October 1, 2025, the U.S. federal government is in a partial shutdown after Congress failed to pass new funding legislation. While many essential operations will continue, several functions within the Department of Education (ED) and Federal Student Aid are being furloughed, raising concerns about potential disruptions for student loan borrowers.
Key Impacts to Watch
Loan payments remain due. Borrowers must continue making payments during the shutdown.
Servicing and support delays are possible. Because much of the ED will be furloughed (reportedly ~87 % of staff), functions like customer service, correction of errors, or processing forgiveness applications may slow or temporarily stall. Your student loan servicer will not be impacted as they are contracted and not associated with federal employment.
Forgiveness and appeals processes could slow. Borrowers awaiting decisions on Public Service Loan Forgiveness (PSLF), income-driven repayment adjustments, or appeals may see longer processing times.
Collections and garnishments may still move forward. Defaulted borrowers remain at risk of wage garnishments or other collection actions.
What Borrowers Can Do Right Now
Keep making your payments on time. Don’t assume a shutdown gives you a free pass.
Document your communications. If you contact your loan servicer and run into delays, keep records (phone logs, emails) to protect your rights.
Monitor your account status via SDS. Our system can help you track eligibility, deadlines, and potential forgiveness paths—even when federal systems slow.
Be proactive with paperwork. If you’re planning to apply for forgiveness or change repayment plans, submit your forms early to avoid delays.
Reach out for help. If servicer support is unavailable or unresponsive, SDS is here to bridge the gap—providing strategy advice and action plans you can move forward with independently.
At SDS, we’re closely monitoring these developments. No matter your situation, we’re here to help you understand how potential changes may affect your path.
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