How a government shutdown will affect your student loans

A government shutdown never comes at a convenient time, but the potential for an Oct. 1 closure could hardly come at a worse time. It just so happens to coincide with the resumption of federal student loan payments for some 44 million Americans after a three-and-a-half-year pause.

Federal student loans began accruing interest again in September, but the first actual due dates for payments begin in October (the exact date varies by individual borrower). Experts were expecting borrowers to be confused, overwhelmed, and anxious even without a government closure thrown into the mix.

Lawmakers now have three days to pass annual budget legislation and avert a shutdown. Analysts and other experts don't count on that happening. "A government shutdown this year has looked likely for several months, and we now think the odds have risen to 90%," Jan Hatzius, Goldman Sachs’ chief economist and head of global investment research, wrote in a Wednesday note.

If the government does close down, Oct. 1 payments for student loans will still be due (and interest will still accrue). Borrowers pay their servicers, which are third-party companies that contract with the federal government to handle billing and other loan maintenance. Those companies are paid by the U.S. Department of Education—and the funds are included in the budget legislation—but they might have enough money already to keep the processing running.

The extent of the delays and possible disruption will depend on the length of the shutdown.

"If Republicans in Congress go down this road of shutting down the government, we anticipate that key activities at Federal Student Aid will continue for a couple of weeks," White House press secretary Karine Jean-Pierre said at a press conference earlier this week. "However, if it is a prolonged shutdown it could substantially disrupt the return to repayment effort."

That said, a shutdown could present headaches in other ways, including that there may be fewer workers at the Education Department to answer questions and help borrowers solve any problems that crop up; more than 90% of Education Department employees will be furloughed during the first week of a lapse in funding, according to a contingency plan made by Education Secretary Miguel Cardona. In that way, the shutdown couldn't come at a worse time—there are likely to be plenty of issues after a a three-plus-year hiatus.

Some things still remain unclear

For example, there is likely to be confusion around the new SAVE plan, an income-based repayment plan recently introduced by the Biden administration. Borrowers may also have questions about the "on-ramp" to repayment, a 12-month grace period the administration instituted to help those who might struggle to pay their bills. There have been many changes to student loan repayments, terms, and servicing companies since the start of the pandemic.

Another source of confusion: What exactly is going on with student loan forgiveness? While President Joe Biden's widespread forgiveness plan was blocked by the U.S. Supreme Court, his administration has forgiven a slew of loans in other ways. Borrowers affected—or those who may erroneously think their loans were forgiven—may run into problems with their servicers having the right payment information or even understanding how much they owe now.

Additionally, there could be delays for those in school applying for federal aid, as the shutdown could slow down the FAFSA application process. It could also slow down the process for loan forgiveness for those who qualify.

And of course, plenty of others will be impacted by the shutdown in other ways. Millions of federal workers could be furloughed while others work without pay. Air travel could get even worse.

Even before the first payments are officially due, borrowers have started repaying billions of dollars of student loan debt. Those who need help figuring out what payment plan is best for them or how much they owe can go to studentaid.gov or contact their servicer.

This story was originally featured on Fortune.com