Key points
- The White House notes that all furloughed workers may not receive back wages, creating new financial risks during the shutdown.
- Until workers receive notice that they are not exempt and effectively stop receiving paychecks, they cannot modify their loans.
- If paychecks stop, and workers are not paid, re-certifying for an income-based repayment plan for your student loan with $0 income can reduce payments and protect PSLF eligibility.
The October 2025 government shutdown has entered its second week, sidelining more than 620,000 federal employees and disrupting key government functions. The IRS alone furloughed 46% of its workforce this week, while large parts of the Foreign Office, Home Office and Justice Department remain partially closed.
Tomorrow, October 10, will be the first paycheck federal employees will see that is less than usual (since it includes the period of the first days of the shutdown).
But then the financial pressures deepened President Trump has suggested that some furloughed workers may not get paid once the shutdown endsDespite the 2019 law designed to ensure this.
the Fair Treatment of Government Employees Act of 2019 (PDF), which passed after a record 35-day shutdown in 2018-19, added language to the anti-deficiency law that requires all furloughed and exempt employees to automatically receive their wages “as soon as practicable” once appropriations resume.
However, a new draft White House memo interprets this provision differently, arguing that Congress must still pass appropriations before any back pay can be issued.
An earlier Office of Management and Budget memo dated September 30 reaffirmed the 2019 Act’s guarantee of back pay. But that reference was removed in an update on October 3, suggesting there was internal debate within the administration about whether the law was self-enforceable.
For workers who have federal student loans, the implications are particularly serious. A missed or late payment can quickly translate into missed loan payments and potential delays in Public Service Loan Forgiveness (PSLF) progress.
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PSLF eligibility protection if paychecks stop
For most government employees, the goal is simple: Avoid missing payments and keep your PSLF progress intact.
Under PSLF, federal employees can have their student loan balance forgiven after 120 qualifying monthly payments while working full-time for a government or nonprofit employer. Payments made under an Income-Driven Repayment (IDR) plan are not calculated and forbearance months are not typically calculated.
This means that the safest way to deal with lost pay is to do so Update your IDR plan instantly To reflect your current income, which could be $0 during vacation.
This keeps your loan in good standing, keeps forgiveness moving forward, and protects your credit, all while allowing you to make an affordable payment.
It is important to note that receiving late payment is different from receiving late payment no Receive pay. If you receive a late payment, your income will drop to $0. I was just late with my payment. In this case, you cannot lie about your income. Forbearance may be the only option if you can’t afford your payment.
However, if you don’t actually get your money back this time, your income is $0. After that, you are eligible to change your payment plan amount based on your current income. The nuance is important.
How to set up your student loan payment based on $0 income
Here is the step-by-step process for furloughed workers who are not receiving their salaries:
1. Log in StudentAid.gov And choose “Income-Based Repayment Plan.”
2. Choose “Readopt or change your income-driven repayment plan.“
3. Enter your current income as $0 If you are not receiving pay during the lockdown (but realize you may have other income).
4. Upload documentation, such as your furlough letter, or write a brief statement explaining your loss of income.
5. Submit your order and monitor your account to ensure your payment is recalculated.
Under IDR rules, payments are tied to discretionary income. If your income drops to zero, your monthly payment could drop too – and These $0 payments still count toward PSLF As long as your business remains active.
Why should patience be a last resort?
If you are receiving late payment and simply need a short notice until you get paid, a short notice of a month or two may make sense. Because you will eventually be paid for the time you work.
Although forbearance provides a quick stop payment, it usually comes with hidden costs:
- Interest continues to accrue-Increase your total balance.
- PSLF advance haltedsince most forbearance periods do not count toward qualifying payments.
- Restart payments Post forbearance can take time and require additional paperwork.
If you qualify for a lower payment because you don’t get paid but can’t process your IDR request in a timely manner, ask your server for a Short-term tolerance (30-90 days) To avoid distraction while waiting.
Are furloughed workers still “employees” of PSLF?
Yes, you still work when you’re off. Even if you don’t get paid during the shutdown, you are still considered an employee of your federal agency.
However, after that it may become difficult. Most government shutdowns last only a few days to a week. In these situations, the “full-time 30+ hours per week” requirement will likely not be affected since you still have several full-time weeks during the month.
If this government shutdown lasts more than a month, the Department of Education may say that entire month will not qualify for PSLF, since you are not working full-time. It remains to be seen whether they will go into detail (or have the staff to do so).
But, assuming you are still on the payroll and have not resigned, you should consider yourself eligible for PSLF during this period.
To protect your record:
- Save your Leave notice and HR emails.
- Continue submitting your application PSLF Employment Certificate Form As usual.
- Ask your Human Resources office to verify your employment dates once the government reopens.
This documentation ensures that your PSLF progress is not later interrupted by confusion about your leave status.
What about government employees who work without pay?
While nearly half of the federal government is on furlough, the other half is working without pay. What options are best for them?
It’s a similar scenario: Since you work full-time, and will receive back pay (since you’re working, not vacation), your time will still be eligible for PSLF. As long as you keep up your payments, they will count as eligible payments.
The problem is making this payment if you cannot afford it due to non-receipt of salary.
In this scenario, you’re faced with an unattractive choice: patience. It’s unattractive because it means your time is spent working wont Counting for PSLF. But if you really can’t afford your down payment because you need to save cash to cover necessities like housing and food, you don’t have to worry about paying off your student loan.
Is your IDR processing delayed?
If you want to change your payment plan due to a change in income, won’t it take forever? Not real.
We are seeing most IDR requests processed within 3 to 7 days, since most of this work is handled by outside contractors such as student loan servicers.
If you start missing paychecks and are unable to process your IDR request, you can request a processing timeout during that period so that there are no payments due while the IDR request is being processed.
Dealing with a cloud of uncertainty
With management questioning whether back pay is guaranteed, furloughed workers should plan for the possibility that their lost wages during the government shutdown will not make up for the time they spent not working.
Practical steps include:
- Prioritize basic expenses Such as housing, utilities and food.
- Pause unnecessary spending and automatic transfers where possible.
- handle Emergency savings If available, instead of high-interest credit.
- Choose a bank that provides closing support He loves Marine Federal Credit Unionwhich provides shutdown assistance to affected members.
For families relying on back paychecks to catch up, this uncertainty underscores the importance of reducing fixed liabilities now, including student loans.
Takeaways for federal workers
- Plan to delay salaries:Late payment is not guaranteed, so manage expenses conservatively.
- If you will not be paid:Re-certify your IDR plan now if it qualifies to reflect your $0 income before missing payment.
- Keep PSLF progress intact By avoiding tolerance except as a last resort.
- Follow official updates From the Department of Education, Office of Personnel Management, and StudentAid.gov.
- Keep records Your employment, communications and requests to protect your eligibility later.
Don’t miss these other stories:
Government shutdown and student loans explained (2025 update)
How will the government shutdown affect your investments?
Can President Trump reverse student loan forgiveness?
Editor: Colin Greaves
The post Student Loans and Leave: What to Do Now appeared first on The College Investor.
