Earlier contingently by U.S. Department of Education Sept. 28, from a possible partial government shutdown, beginning Oct. 1, many Americans are alarmed and anxious about any disruption to federal programs, including that of service and repayment of their student loans. Borrowers will still be required to make payments on their outstanding student debt even if agencies furlough employees. Here’s what the shutdown means for other student loans and everything the borrower’s expectations are moving forward. As the Department of Education has also said since August 1, 2025, As of August 1, 2025, student loans in the Saving on a Valuable Education (SAVE) Plan have begun accruing interest.
Here’s how to move to a legal repayment plan so you can begin making qualifying payments: studentaid.gov/loan-simulator/.
The repayment requirements
Despite any shutdown of non-essential federal operations, the Education Department made it very clear that people in repayment of loans for students would still have that requirement in place. Borrowers are required to make their monthly payments as scheduled or face late fees and possibly impact on their credit reporting. The loan servicers — private contractors that manage billing and customer service — are funded out of fees paid from loan balances; as such, they must maintain normal operations.
For many borrowers, payments are made automatically through autopay, and there would be no disruption. Those who manually make payments online or via regular mail should plan ahead, however; mail and processing centers may have delays if there is a minimal staff due to furloughs or lack of capacity.
Servicing and customer support
Servicing companies such as FedLoan, Nelnet, Navient and Great Lakes take care of everything from billings to process consolidations to address questions from borrowers. Most of the time, these servicers do not shut down or freeze operations during federal government shutdowns because they do not rely on direct appropriations from Congress for their operational funds. Therefore :
- Billing and payment processing: Borrowers are sure to receive statements, online access to their accounts, and have autopay debited from accounts like before.
- Customer service: Call centers will function, as well as online chat services; however, call volumes may go up.
In other respects, any technical problems involving the need for direct intervention from the Education Department — such as proffering missing documents or resolving certain inconsistencies — will typically be delayed until funding resumes.
Effects on Income-Driven Repayment plans
An income-driven repayment (IDR) plan provides a relief to borrowers on a monthly basis payment depending on the household income and household size. In addition, recertification occurs annually, whereby one has to submit proof documents to the Department of Education. Under a shutdown, Department of Education’s operating systems may not process new applications or recertifications:
- Active IDR enrollments: If the servicers have income information already on file, then existing enrollees will stay within their current payment structure.
- Processing delays on recertification: Borrowers due a recertification from October 1 until the end of the shutdown should turn in their paperwork, but processing might be backed up.
Late recertifications could lead to temporary payment jumps or service disruptions; however, servicers do often provide grace periods for those situations.
Cessation of further relief initiatives
Congress and the administration have proposed measures to relieve student debts, but any further programs that require either the drafting or approval of rules by the Department of Education are indefinitely on hold. Among the aforementioned activities, which are likely to be affected, are:
- Implementation of new forgiveness packages
- Processing of new loan cancellation requests
- Updating borrower communication materials
Borrowers waiting for approval for new relief measures will have to check official sources and gird themselves for delays.
Federal Student Aid office availability
The Federal Student Aid (FSA) office usually manages the federal loans and grants. When a lapse in funding happens, FSA places non-essential employees on furlough, which will affect:
- Federal payment systems maintenance
- New borrower tools developments
- Policy and regulatory work
Generally, critical services pertaining to and directly affected by student aid disbursement continue under accepted status. For instance, such exceptional services include student aid disbursements, processing Pell Grant payments, and servicing schools on Direct Loan disbursements. However, those borrowers seeking detailed policy guidance directly from FSA may find themselves subjected to elongated time-response delays.
What borrowers should do now
To avoid problems during the shutdown, student loan borrowers should actually:
1. Confirm autopay settings: After the run, check bank accounts to ensure payments post as scheduled.
2. Download statements: Save current bill statements or payment history if online portals go down.
3. Submit recertification early: For IDR plans, submit annual income documentation well before the deadline.
4. Contact servicers proactively: Resolve payment processing or account status issues prior to furloughs taking effect.
Student loan repayment and servicing should largely continue despite a government shutdown via private loan servicers funded by borrower-paid fees. Borrowers continue to be obligated, by law, to make timely payments because they protect their credit while avoiding additional interest or penalties.
Read more: What are the eligibility criteria for Public Service Loan Forgiveness (PSLF)?
Read more: Who do you contact if you’ve already accepted more loan money than you need?
