What Happens to the FAFSA if the Department of Education Shuts Down? Experts Weigh In
The White House claims the department will still manage student loans, but the future of FAFSA remains uncertain
President Donald Trump on Thursday followed through on his threat to "begin eliminating" the Department of Education via executive order, although most legal experts agree congressional approval will be required to actually end the agency.
One critical function of the department is the administration of federal student financial aid like grants and student loans. If the Department of Education is closed, what does that mean for the Free Application for Federal Student Aid, or FAFSA?
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In earlier comments to reporters Thursday, press secretary Karoline Leavitt said that, "when it comes to student loans and Pell Grants, those will still be run out of the Department of Education." However, on March 11, the department staff was slashed by nearly half and the studentaid.gov website went down for hours.
"These workforce reductions raise serious questions about the future functionality of federal aid programs," student loan expert Elaine Rubin said in an email. "There has been little communication about how the department plans to sustain efficient operations and prevent disruptions."
If you're worried about filling out the 2025-26 FAFSA -- or have already submitted it -- here's what you need to know.
Is the FAFSA going away?
Even if the Department of Education is abolished, experts do not think federal student aid or the FAFSA will disappear.
"The software system and call center are through contractors, but there is still significant work done in-house," student loan expert Mark Kantrowitz said in an email. "After last year's FAFSA fiasco, terminating staff could be a disaster."
Both Rubin and Kantrowitz say management of the FAFSA process could be transferred to another agency.
Rubin noted the FAFSA is the "trigger application" for not only federal financial aid programs but also for many state and institutional aid programs.
"It would be a huge undertaking to replace the FAFSA, but that doesn't mean that at some point it can't be," Rubin said. Because a complex web of programs rely on the application, "we don't really anticipate the FAFSA going away at this time."
Where else could the FAFSA go?
More than 17 million people completed the FAFSA in the 2022-2023 cycle.
Although the White House says that student loans will still be managed by the Department of Education, this latest executive order and workforce reductions at the agency could mean that FAFSA processing is transferred to another federal department.
Possibilities for a new home for FAFSA include the Treasury Department or the Internal Revenue Service because the FAFSA form already connects to the IRS system to upload tax return data.
Kantrowitz said the US Treasury Department is the most likely destination for student loan programs. He added that no matter which agency takes it, the federal government must continue to administer and manage student aid.
"The states are incapable of handling student loans," Kantrowitz said. "Private lenders lack the capacity and appetite for privatizing the federal student loan portfolio."
If the FAFSA does move to Treasury, Kantrowitz said borrowers likely wouldn't notice much of a difference.
"Most functions [of student loan programs] are implemented through contractors," he said. "Treasury lacks experience with higher education rules so there may be some initial chaos."
Should you still submit FAFSA?
If you need help paying for college, experts say you should continue to use the FAFSA. The form is used to determine your eligibility for financial aid, including Pell Grants, scholarships, work-study programs and student loans.
Rubin noted one group of people who have added concerns about filing a FAFSA: Students who need to report information from a parent or spouse who's an undocumented immigrant. Applicants who are non-US citizens with qualifying documentation may be eligible for financial aid; the status of financial "contributors" such as parents and spouses doesn't impact eligibility.
The Privacy Act of 1974 forbids the agency from sharing certain identifying information without written consent or an explicit agreement. Under current agreements, the department shares FAFSA information for applicants -- but not contributors -- with the Department of Homeland Security to verify an applicant's status. But this administration's aggressive stance against undocumented immigrants has many families worried about filing information that could be illegally shared with immigration authorities, Rubin said.
She doesn't have universal advice for these applicants. "It really has to come down to ... what's best for the family and what they're comfortable with."
What to expect if you submitted your FAFSA application
If you've already submitted your FAFSA form, the Department of Education says it will process your online application within one to three days (paper form submissions take longer).
After your form is processed, you can log in to StudentAid.gov to see your submission summary and make corrections. However, because of the staffing cuts, you should expect delays if you have any questions or issues with your application, experts warned.
The summary should include your Student Aid Index, which the department sends directly to the schools you listed on your FAFSA form. The schools use your SAI to calculate the amount of financial aid they'll offer you. If you're worried your school hasn't received your information to determine your financial aid package, contact your school's financial aid office.
This story originally appeared on: CNet - Author:UK GAG
