The government shut down Wednesday at 12:01 a.m. after lawmakers were unable to reach an agreement to extend government funding.
This is the first government shutdown since the December 2018 to January 2019 shutdown, which lasted 35 days. This previous partial shutdown delayed approximately $18 billion in federal discretionary spending for compensation and purchases of goods and services.
The current shutdown was prompted by Congress failing to pass a bill to cover the new fiscal year by the deadline, Oct. 1. Democrats refused to support a Republican plan to extend funding, unless their concerns regarding health care, such as the immediate expansion of healthcare subsidies, were addressed.
A compromise between Democratic and Republican lawmakers needs to be reached. While Democrats’ refusal to support the measure has a valid cause, if ongoing, negative implications on the economy and job market will be detrimental to students preparing to enter the workforce.
This disagreement within the Senate has implications beyond internal government affairs, but has drastic negative effects on the everyday citizen.
During a shutdown, federal agencies halt nonessential functions. While the effects will depend on the duration of the shutdown, CBS News reports that “almost no federal workers, whether they are furloughed or not, will be paid until Congress reaches a deal.”
In preparation of the government shutdown, the White House Office of Management and Budget began instructing federal agencies to prepare for mass firings, targeting non-essential employees.
This government shutdown has the potential to disrupt multiple areas of federal funding — including student loans.
While it is unlikely that there will be a drastic impact on financial aid, some borrowers and students in the application process could encounter delays in processing due to the furloughing of non-essential workers.
For FASFA, Pell Grant or other loan recipients, this mass layoff could make it increasingly more difficult to manage these finances.
The American Council on Education states that short-term shutdowns often have minimal effects on higher education institutions, however the longer a shutdown lasts the greater the probability of negative implications. This could include delays in the processing of financial information for borrowers, the slowing of research and grant funding, and decreased access to key support systems.
Additionally, government shutdowns have lasting negative effects on the economy and the workforce. Shutdowns reduce government spending and programs, and the furloughing of non-essential workers reduces their spending. For soon-to-be graduates, an extended shutdown could be detrimental to the economy they are about to join.
This also impacts the job market. Considering the job market has weakened and offers few opportunities for job seekers in 2025, these mass layoffs will introduce new hardships for those entering the workforce following the shutdown.
The length of the shutdown is a major factor in how drastic its implications will be, the longer it is prolonged, the more drastic the effects will be on upcoming years.
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