The Federal Government will run out of funding later this month and has the potential to shut down, which could have lasting impacts on federal work study and federally bankrolled programs at Cal State LA.

If Congress is leaning towards a shutdown on October 1, 2025, and no decision is made before the September 30 deadline, the impact on Federal Student Aid could mean less money in the 2025-26 academic year. Federal actions can reduce those state funds, and CSU is working to rely on its own tuition and fees.

“Even a short-term shutdown can cause uncertainty for students and staff, especially those dependent on federal aid disbursements,” said Sandor Fenecz, an economics professor at Cal State LA.

​If funding bills are not passed, this could impact CSU schools and delay the flow of federal dollars into universities like Cal State LA. The CSU reported that undergraduates receive Pell Grants; however, over 60% of Cal State LA students had their tuition covered by grants, scholarships, and waivers in the 2022-23 academic year. The Fund was already allocated for the academia 2024-25.

The Department of Education is connected to FAFSA, which determines the eligibility for aid by income, enrollment status, and processes the aid type for federal work, grants, and loans. Unfortunately, CSULA funds were cut from the grants for Hispanic-Serving Institutions and other smaller programs aimed at specific minority groups.

​“Federal Work-Study is a hidden gem because it provides steady income, builds employment history, and strengthens ties between students and faculty,’’  Fenecz said

The Work-Study program earned a total of nearly $25 million from the federal work studies  CSU students during the 2023-2024 academic year, according to an article by Alex Beall. Work studies provide students with experiences to engage with their community, learn skills, and earn money to help pay expenses while gaining valuable work experience.

“A prolonged shutdown may cause delay in processing financial aid applications and distributing funds to students who rely on federal support for tuition and basic needs,” Fenecz said.

According to reports from the 2025-2026 CSU Budget, the CSU system is having to cut its budgets because of a 3% deferment to the 2026-2027 school year. This further stresses the available budget for schools, and has them more reliant on sources of funding like money from the federal government, which could halt if the government shuts down.

If there is no continuing resolution, the shutdown may begin as soon as Oct. 1. While the duration is uncertain, the impact will be felt at Cal State LA. Professors on federal grants could lose funding, and campus jobs, and research projects could be frozen. 

“The longer the shutdown lasts, the harder it will be for students to trust that their aid will come on time,” Fenecz said. “That uncertainty creates stress and distracts from their education.”

Any questions or how the shutdown could affect you or have questions about any other legislation? Reach out to us at [email protected].