Today is the day. Congress must pass funding legislation by midnight tonight (9/30) to avoid a government shutdown. The House passed a continuing resolution through November 21, but the same measure requires 60 votes to pass in the Senate, and negotiations have come to a stalemate.
In the first week of a shutdown, the biggest disruption isn’t lost funding—it’s the uncertainty itself. Districts and states often respond with hiring freezes, spending holds, and delayed purchases until the outlook stabilizes. Uncertainty, particularly in light of the disruptions over the past nine months, slows procurement cycles and chills the market.
While shutdowns are not new, this one has a new twist. OMB is using the shutdown to accelerate federal workforce reductions. Agencies have been directed to issue reduction in force (RIF) notices in addition to furlough notices, with the guidance that once FY 2026 appropriations are enacted, they should revise those RIFs to keep only the minimal staff required to meet statutory obligations. In practice, that could mean some employees furloughed at midnight may not return.
Education Department’s Shutdown Contingency Plan
Under its shutdown contingency plan, the Department of Education would shrink to a skeleton crew of about 330 employees—just 13% of its normal workforce. More than one-third of that group (115 staff members) would be solely within Federal Student Aid, leaving barely 200 people to cover all other functions of the agency.
In the plan, the Department confirmed that Title I and IDEA will be available and that “states, schools and other grantees will continue to be able to access funds from the billions of dollars in recent awards the Department made over the summer.”
This skeleton crew approach means that while money continues flowing for most programs, the infrastructure that supports them will be unavailable.
Potential Impacts on Education
Early Childhood
Head Start: Head Start programs face different challenges. Because the Department of Health and Human Services issues Head Start grants on rolling cycles throughout the year and maintains no reserve funds, programs with October renewal dates could face closure within two to three weeks. During the 2013 shutdown, programs in several states had to close their doors, affecting thousands of low-income children and working families.
K-12
Forward-Funded Programs: In a government shutdown, most K-12 federal funding remains protected through forward funding, a mechanism in which Congress appropriates money in one fiscal year for use in the next school year. Congress is negotiating FY26, which would not go out to schools until July 2026. FY25 funding scheduled to go out in October should be available as scheduled. Similarly, school meal programs also continue uninterrupted, as USDA maintains three months of reserve funding for reimbursements.
Impact Aid: Impact Aid stands alone as the only K-12 federal program without forward-funding protection, making it uniquely vulnerable in this situation. Districts that receive Impact Aid are immediately and critically affected by a shutdown.
What is Impact Aid? Over 1,000 districts nationwide rely on Impact Aid funds to compensate for tax-exempt federal property within their boundaries. These districts, many serving military bases or tribal lands, typically receive payments at the start of October to cover basic operations like teacher salaries and utilities because they cannot raise local revenue from that property.
Role of SEAs: State education agencies find themselves in a challenging position during shutdowns. They now must field technical assistance calls that would normally go to ED.
Higher Ed
Federal Student Aid: Pell Grants and federal student loans are also forward-funded, and loan servicing operates through contracts that continue during a shutdown. Students will receive their aid on schedule, and borrowers must continue making loan payments. Students and families will also be able to continue filing the FAFSA, which launched on September 24, and bring their questions about the form to the FSA call center.
Negotiated Rulemaking: Official communications from ED on September 30 indicate that the rulemaking sessions scheduled for in-person on October 1-3 would be postponed to October 15-17 and shifted to a virtual format. However, Inside Higher Ed reported that at least one ED official expects the in-person sessions to proceed as scheduled this week, regardless of whether or not the government shuts down. Any compression of regulatory timelines creates compliance planning challenges that ripple through institutional budgets and/or could significantly delay ED’s implementation of new regulations to implement the One Big Beautiful Bill Act.
Research Institutions: Research universities face particularly acute impacts. The National Science Foundation and National Institutes of Health would halt all new grant awards immediately and review panels would be canceled. While existing multi-year grants can continue, researchers cannot receive modifications, extensions, or supplemental funding.
International Students: International student services could also experience complications. While consular services typically continue, processing for certain visa categories may slow. The Department of Homeland Security would only carry out essential enforcement activities, potentially delaying status changes and work authorizations that international students and scholars depend upon.
Data Blindness: The Integrated Postsecondary Education Data System (IPEDS) may become inaccessible, removing a critical source for enrollment trends and institutional health metrics. Student loan portfolio data that investors rely upon for market assessments would not be updated.
Duration Matters
The longer a shutdown lasts, the more disruptive it becomes. In the first week, the impact is mostly logistical—websites go offline, phones go unanswered, and paperwork stalls. Most organizations can work around short delays, but should the shutdown persist, broader systemic issues will come to light and reversing the damage will become more difficult.
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