Will Higher Ed Feel the Effects of a Federal Shutdown?

The potential for a government shutdown is growing as the end of the month -- and the federal government’s fiscal year -- draws closer. But even if Congress is unable to continue funding the government, the impact of a shutdown on higher education over all will be minimal, as long as it’s only for a short period of time.

By Sept. 30, Congress has to pass a continuing resolution to approve another year of funding for federal departments and agencies. The House passed the bill last Tuesday with only Democratic votes, and the Senate will take a procedural vote on it today.

However, the bill will require 60 votes to pass the Senate, and the 50-50 split between the two parties means 10 Republicans will have to support it. That looks unlikely -- Democrats have tied the spending bill to a vote to raise the debt ceiling so that the government can continue borrowing money and avoid defaulting on its loans in mid-October. And Republicans are adamant that Democrats will have to figure out how to raise the debt ceiling without their votes.

“We do not have divided government,” Senate Minority Leader Mitch McConnell, a Republican from Kentucky, said last week. “Democrats do not need our help. They have every tool to address the debt limit on their own -- the same party-line process they used to ram through inflationary spending in March and already plan to use again this fall.”

The White House Office of Management and Budget notified federal agencies last Thursday to begin preparing for a shutdown, though a spokesperson said that’s a part of their standard management procedure and they believe Congress will be able to reach an agreement.

If the government shuts down, the impact on the day-to-day operations of colleges and universities won’t be beyond the level of “an annoyance,” said Terry Hartle, senior vice president for government relations and public affairs at the American Council on Education.

“Federal contracts might be slowed up for a couple of days,” Hartle said. “People trying to get immediate questions answered from government agencies -- about how to do things like implement vaccine mandates -- won’t find anybody answering the phone. It’s obviously a failure of our democracy, but it doesn’t significantly impact students or institutions.”

A federal shutdown shouldn’t impact student financial aid, either, according to Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators. The Office of Federal Student Aid at the Department of Education relies on outside contractors for most of its operations, so disruptions aren’t expected. Plus, because financial aid goes out at the beginning of the semester, students should already have received it.

The primary issue for institutions is likely to be a delay in processes for grant funding, since when the federal government shuts down, so do the grant-making arms of the federal agencies. The National Science Foundation and the National Endowment for the Humanities completely shutter during a shutdown, and while the National Institutes of Health doesn’t fully close, most of its staff is furloughed. So, any scheduled review panels for grant applications will be halted.

The Department of Education, NSF, NEH and NIH directed inquiries about the impact of a government shutdown on their operations to OMB. OMB said it “is preparing for any contingency, and determinations about specific programs are being actively reviewed by agencies.”