As of late Tuesday, congressional Democrats and their Republican counterparts, allied with the president, appear far apart in reaching an agreement on a continuing resolution (CR) to keep the government functioning after midnight.
Many factors have led to this impasse, but the basic difference between the parties is that Democrats want to link a funding bill to legislative changes they cannot otherwise obtain, while Republicans support moving a “clean” measure that simply provides program funds. The latter approach is the conventional structure of a CR, though legislative “riders” and other provisions unrelated to funding do often accompany CRs.
Adding to the heated discussions: Uncertainties in the awarding of funds for the current fiscal year (FY) 2025 as it draws to a close, and the desire by Democrats as well as some Republicans to preclude similar contingencies in FY 2026.
If the government shuts down, the Office of Management and Budget (OMB) is the primary federal agency that oversees the process and requires federal agencies to develop detailed contingency plans about how the shutdown will impact operations.
As part of shutdown contingency planning, OMB Director Russ Vought has threatened to implement mass layoffs of federal workers overseeing appropriated programs that are not priorities of the Trump administration. That said, the departments of Education (ED) and Labor (DOL) have already absorbed massive staffing reductions, and further reductions simply may not be feasible.
ED’s plan for the shutdown
The good news for community colleges under ED’s shutdown plan is that the department will continue to disburse Title IV student aid, including the lifeblood Pell Grant program. Student loans origination and repayment would continue as normal. Generally, institutions will be able to continue using grant funds that they have already received (some having received awards at the very close of FY 2025), though new grants cannot be made, nor can agencies respond to inquiries — the federal government basically “won’t be home” for stakeholders.
The negotiated rulemaking or “neg reg” process that started this week to discuss changes to the loan programs made in this summer’s reconciliation bill will proceed under a shutdown, but only in a virtual mode for the remainder of this week. The process of developing plans for the second neg reg panel, which will cover the Workforce Pell Grant and the new accountability framework for loans, will also apparently proceed, but some employees who might otherwise have informed the implementation of Workforce Pell will likely be sidelined.
The shutdown would undoubtedly affect administering Title IV as it relates to processing applications, receiving technical assistance and support, and, in general, campus interactions with Office of Federal Student Aid (FSA) officials. Institutions are already feeling the impact of employee reductions that occurred earlier this year. ED’s Office for Civil Rights, which is responsible for compliance with Title VI, would pause its review and investigations of civil rights complaints.
At DOL
Under the DOL’s shutdown plan, dramatic changes would happen. The Employment and Training Administration (ETA) — the unit of the DOL with which community colleges most commonly interact — will continue to provide support for payment and administration of Unemployment Insurance, Job Corps and dislocated worker grants, but will cease the following activities:
- ETA staff will not answer grantee inquiries.
- No program performance or financial reports will be reviewed from grantees. No registered apprenticeship standards will be processed by federal staff.
- No audit-related requests and responses will be fulfilled.
- The Office of Foreign Labor Certification will not continue to process prevailing wage determinations and labor certification applications.
A bare-bones staff of 31 ETA employees, out of 980, will remain on board. A number of other DOL agencies will completely cease operations, including the Bureau of Labor Statistics, Veterans Employment and Training Service and Office of Federal Contract Compliance Programs.
Looking ahead
The looming shutdown feels somewhat different, and potentially more consequential, than previous shutdowns, for all their impact on the country. One reason is that the Trump administration has at times diverged from traditional procedures and expectations around the expenditure of federal funds. In many cases, these actions have meant disruption and an outright loss of support for community colleges.
A government shutdown of indeterminate length could exacerbate the administration’s inclination and ability to reorder federal support. The administration has already acted to unilaterally reprogram higher education funds intended by Congress for other purposes, including terminating support for Minority-Serving Institutions and Title VI HEA international education programs.
If you have any questions about the impact of the impending government shutdown, please contact AACC’s government relations office.
