Sunday, January 21, 2018

The Shutdown

UC reports on how federal shutdown affecting California universities

The University of California announced that the statewide system will be affected as a result of Friday night’s federal government shutdown...

How will a government shutdown impact the University of California?

The impact will depend on the length of a federal government shutdown as well as guidance from the Office of Management and Budget and each of the federal agencies.


We expect little to no immediate impact on research funding. Of course, our assessment will change depending on how long a federal government shutdown lasts.

Additional background: We expect that the Office of Management and Budget will release guidance to address activities conducted by federal employees during a shutdown. We will review those materials when they are issued. (During the government shutdown in 2013, generally, federal employees were not allowed to conduct routine activities in oversight, inspection, accounting, administration, etc. No new grants or contracts were allowed to be issued. We expect that each agency will provide additional and detailed guidance regarding a government shutdown and may have some discretion.)


It is important to underscore that the fiscal year budget that the government is trying to finalize now applies to academic year 2018-19, which will start on July 1, 2018. The final funding totals would impact Pell Grants that are issued after July 1, 2018. The University of California has urged Congress to preserve Pell Grant funding as well as other key financial aid programs.

If a short federal government shutdown were to occur, we expect it to have limited, if any, impact on our educational services and financial aid programs. If the shutdown were to become prolonged, we would feel an impact, but we are hopeful that Congress will be able to reach agreement on a budget that includes strong funding for education and research programs.

The university will do all it can to shield UC students from harmful effects of a short government shutdown, including — if need be — advancing UC funds to substitute for federal financial aid so that financial aid reaches students when promised. Again, we do not expect a short federal government shutdown to have an immediate impact on our students, but the final appropriations totals could affect the student aid they receive next year.

With $377 million in federal Pell Grants and $1.1 billion in federal student loans annually, holding students harmless during an extended shutdown could require a significant amount of forward funding by the university.

Furthermore, students who have not completed the required processes to receive federal financial aid (e.g., filing a FAFSA or completing loan forms) would be required to wait during any government shutdown before the university could verify their eligibility.

Perkins Loans

The Perkins Loan program expired on Sept. 30, 2017. UC continues to urge Congress to reinstate this important student financial aid program.

How many UC students receive Perkins Loans?

Perkins Loans, which in 2015-16 provided nearly 16,000 very low-income UC students with almost $25 million in financial aid, are a vital resource to those students who otherwise would have difficulty accessing funds from a private lender.

How will current UC students who receive Perkins Loans be impacted?

Based on grandfather provisions included in the Higher Education Act, UC will be allowed to make Perkins Loans to certain students for up to five additional years (through Sept. 30, 2022) to enable students who received loans prior to Oct. 1, 2017 “to continue or complete courses of study.”

What about new Perkins Loans?

The program ended on Sept. 30, 2017 and campuses are not able to issue new loans. UC continues to urge Congress to save this important student financial aid program.

Health care

UC is committed to delivering medical care to the many patients for whom we contract with the federal government to provide services, including patients enrolled in Medicare and Medicaid. However, UC’s five medical centers are among the most significant providers of medical services to these patient populations throughout California, and we need to pay our bills, including paying physicians, nurses, pharmacists and other hospital staff, while meeting all our obligations. While we can help ensure services continue, there is no precedent for a prolonged government shutdown.

National labs

The national labs are federally funded through contracts with the Department of Energy and the National Nuclear Security Administration. The labs will receive detailed guidance regarding a government shutdown from those federal agencies. Media questions regarding the impact of a government shutdown on Berkeley, Los Alamos or Livermore National Labs should be directed to the public affairs offices at the respective lab.

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