ED Details Contingency Planning In Case of a Government Shutdown
By Hugh T. Ferguson, NASFAA Managing Editor
As the federal government approaches the end of another fiscal year (FY), the Department of Education (ED) must once again update its contingency plans in case a congressional stalemate leads to a lapse in funding for FY 2026, and prompts a government shutdown.
The department published its plans on Monday, outlining how over 80% of ED and Federal Student Aid (FSA) staff will be furloughed if there is a lapse in appropriations. The department also explained that during a shutdown, student aid, including Pell Grants and Federal Direct Loans, will continue to be disbursed. Additionally, student loan borrowers will be required to continue making payments on any outstanding student loan debt.
Prior to the release of ED’s contingency plan, the Office of Management and Budget circulated a memo that would seek to expand on Reduction-in-Force (RIF) orders and instead carry out mass firings across federal agencies in the event of a shutdown. That memo is not included in ED’s planning, and the department has reinstated some staff since issuing their RIF back in March.
According to department officials at Monday’s Reimagining and Improving Student Education (RISE) negotiated rulemaking committee, if there is a shutdown, the remainder of the week’s session could be conducted virtually between October 15 and 17. However, planning is still in flux with the department evaluating whether it could continue the week’s session if there is a lapse in appropriations.
House and Senate leaders, along with the White House, continue to negotiate over a possible deal to avert a shutdown, but so far it is unclear whether they will be able to meet the October 1 deadline.
Stay tuned to Today’s News for more details, and be sure to check out NASFAA’s new chart detailing ED’s top-line spending for several student aid programs from FY 25 and how proposals for the upcoming FY 26 cycle could impact the department’s budget.
Publication Date: 9/30/2025
Jesse H | 10/2/2025 5:50:03 PM
I noticed on NASFAA Askregs that it says we may not make new SEOG or FWS awards. Does anyone know if this sentence from the Contingency Plan is where they are getting that?
"Non-mandatory programs that do not have available unobligated balances from FY 2025 may not incur new obligations while under a government shutdown caused by a lapse in appropriations unless otherwise allowable under an exception."
Amanda G | 9/30/2025 1:44:55 PM
Page 4 of the contingency plan says:
"It is assumed that the G5 system for making payments to grantees—either grants awarded in prior years or those made with mandatory or carryover appropriations—would continue to operate at least for the first week. For a lapse of more than a week, Department staff would be needed as excepted employees to resolve any issues necessary to prevent significant damage to the underlying exempt or excepted activity. "
If you work in a financial aid or business office, I recommend reading the entire contingency plan document.
David V | 9/30/2025 1:2:26 PM
Maybe I am missing it, but will G5/6 be available to drawdown funds? I know it says we can disburse Pell and loans, but did not clarify if we can actually drawdown the funds.
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