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How Will US Government Shutdown Affect Student Loans, Low-Income Americans

How Will US Government Shutdown Affect Student Loans, Low-Income Americans

Posted on September 30, 2023 By admin


The shutdown comes into effect at 12:01 am on October 1. (File)

The US government is likely to go into a shutdown from this weekend as the Congress looks set to miss the Saturday deadline to fund federal agencies. The political logjam comes after the Republicans, who have a majority in the House of Representatives, demanded the Joe Biden-led government slash budgets and cut down funding for the Ukraine war.  

While the Senate, led by Democrats by a seat, tried to adopt a bipartisan approach to keep the government afloat, the Republicans were in no mood to concede ground until their demands were met. The shutdown will impact air travel, national parks and marriage licenses.

How Long Will The Shutdown Continue?

The US federal budget starts on October 1. So the shutdown comes into effect at 12:01 am on October 1 if Congress fails to pass a funding plan that the President signs into law. Nobody can predict how long the shutdown will last.

The Senate, controlled by Democrats, and the House, controlled by Republicans, are working on different plans to avoid the shutdown. House of Representatives Speaker Kevin McCarthy, despite trying everything, is struggling to get the hard-right conservatives’ support to keep the government open.

What It Means For Federal Agencies’ Staff

If the Congress misses the Saturday night deadline, millions of federal employees risk being furloughed. Not just that, many others will have no other option but to work without pay until the shutdown ends. In the last decade or so, this is the fourth time Congress has failed to keep the government open. 

According to a report, the federal government’s roughly 2 million employees, as well as 2 million active-duty military troops and reservists, won’t receive paychecks during a shutdown.

Supplemental Nutrition Assistance Programme

Millions of low-income Americans’ access to food and nutrition assistance programs is in jeopardy due to the shutdown. The scale of the impact will depend on the duration of the shutdown and programme-by-programme contingency funds.

Besides that, about 7 million women and children, currently relying on SNAP for Women, Infants, and Children (WIC), also risk losing the assistance as soon as the shutdown comes into effect, the Biden administration has said. That’s because the contingency fund for the WIC programmes will likely run out in days.

Will Flights, Travel Be Hit? 

The shutdown is unlikely to affect the US air travel network. Air traffic controllers and TSA screeners, despite being essential workers, won’t be paid until the shutdown ends.

On Wednesday, US Transportation Secretary Pete Buttigieg said that air travel will remain safe in a shutdown, but that the training of new air traffic controllers will stop and 1,000 trainees will be furloughed.

As far as the processing of passports and visas is concerned, it will continue even during the shutdown but only “as the situation permits.” The State Department said consulates in the US and abroad will stay open “as long as there are sufficient fees to support operations.” However, the passport work will stop if the building where the work is done is shuttered.

Will Shutdown Disrupt Student Loans?

Loan servicers will be able to continue to process payments regularly. However, those in need of consultation or help from the Education Department may expect delays due to the potential of agency furloughs.

Similar delays are also expected for students applying for federal aid during a shutdown.

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