The US government officially closed on October 1st after Congressional leaders had not reached a short-term funding agreement since the end of September.
The Ministry of Education will hit around 87% of its staff, according to the agency’s emergency response plan. The department manages the government’s $1.6 trillion student loan portfolio and pays funds and grants to schools and individuals, along with other duties related to K-12 and higher education.
Here’s what current borrowers, university students, and those applying for federal aid should know:
Which sectors of education functions will be affected by the closure?
During the closure, the Ministry of Education will suspend new grant activities and investigations into civil rights violations in accordance with the contingency plan.
However, most grants are paid in the summer, so the impact on institutions and individual recipients should be minimal, the department says.
Can I still apply for federal financial aid?
yes. The remaining Department of Education employees will ensure federally mandatory programs, including federal student assistance and free application for assistance and loan payments, according to the department’s contingency plan. The plan also explicitly states that FAFSA operations should not be affected by shutdowns.
FAFSA opened institutional aid from the university on September 24th this year, which millions of students and families must submit to consider federal grants and loans.
Do I still need to pay my student loan?
yes. Despite the closure, federal student loan payments continue to be due.
Federal student loan borrowers primarily interact with the loan servicer to make payments, change payment plans, and resolve issues. The federal government oversees these servicers, but most borrowers should not have the trouble of getting the assistance they need during the shutdown, unless the servicer is in trouble.
“The education department itself does not serve loans. We pay the loans monthly to the loan service company,” says Kate Wood, a lending expert at Nerdwallet, telling CNBC that Make. “Your servicers are definitely open and they’re definitely collecting payments.”
What should I do if I have a problem with my loan?
If you struggle to pay your loan or have questions about your account, reaching out to your servicer is still “generally your best bet,” Wood says.
A massive layoff at agencies earlier this year has already slowed customer service at the Ministry of Education. So, it may still be difficult to get in touch with the department for those in need, but that is not necessarily the result of a shutdown.
Students who are in the process of acquiring assistance or loans should connect with the school’s counselor or financial aid office if they require FAFSA support.
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