The deadline to avert a government shutdown came and went at midnight Tuesday, dimming the lights on many federal agencies and operations.
As congressional leaders and President Trump plot their next moves to pass legislation to pay the nation’s bills, here’s how the government shutdown affects your finances.
Social Security checks and electronic payments will still be delivered during the shutdown. Medicare and Medicaid programs are also protected from federal funding shortfalls.
We’ll repeat that for those in the back: Retirees will still get their monthly Social Security checks, and healthcare benefits will not be disrupted.
SNAP (Supplemental Nutritional Assistance Program) and WIC (Special Supplemental Nutrition Program for Women, Infants, and Children) benefits can continue if the funding shutdown is not for an extended time. Operating on a tight budget, WIC may be the most vulnerable.
Read more: What happens to Social Security payments during a government shutdown?
A government shutdown can have a major impact on student loan borrowers. The government may temporarily lay off employees — including a majority of those working for the Department of Education. This comes after the administration already made sweeping cuts in March that reduced the Department of Education’s workforce by about 50% and has threatened to fire thousands more federal workers during the shutdown.
The operations that will come to a halt largely affect grants — specifically, the review of grant applications and the awarding of grant funds.
DOE programs with mandatory funding, such as the Pell Grant and Federal Direct Student Loan programs, can still make payments during a shutdown. However, it may only be for a limited time — as long as funds are still available.
Overall, having fewer federal employees on the clock could delay loan processing and forgiveness and make it more difficult to ask questions or resolve issues related to your student loans.
Read more: What is the U.S. debt ceiling, and how does it impact you?
Many federal workers, including airport security and air traffic control, are considered essential and required to continue working during a government shutdown. But you should still be prepared for potential delays and slower wait times at the airport.
Other services may differ. If you need to update your passport or obtain a visa before travel, the US State Department says services will be operational as long as fees are available to support them. Still, issuance of passports could be delayed, and national parks and museums could close or offer limited services.
In short: The longer the shutdown drags on, the more disruptive it could be to your travel plans.
If you’re concerned about long security lines, consider signing up for TSA PreCheck now. Several credit cards offer a credit toward your application fee, including the Chase Sapphire Reserve®, Capital One Venture Rewards Credit Card, and Bank of America® Premium Rewards® credit card.
You may not qualify for coverage if you miss your flight due to long security lines, but travel insurance could also be useful in the case of a flight delay or cancellation. Some credit cards with travel insurance include the Chase Sapphire Preferred® Card and the American Express Platinum Card®(see rates and fees). Always read the fine print to ensure a policy covers what you need, and don’t forget to check your airline or hotel’s flexible cancellation policies.
The impact on the economy will depend on the length of the shutdown. Since government payments are delayed, not diminished, the effect may be minor if congressional leaders resolve the matter quickly.
A larger problem for the economy is the impact on the release of economic data. The Fed recently lowered the federal funds rate to address a slowing labor market, but there are also lingering concerns about the inflationary impact of the new U.S. tariff agenda.
Economic data is central to the Fed’s decision-making and critically important under the dual pressures of potentially higher unemployment and inflation. If the government remains shut down long enough to delay economic releases, the chances of a Fed misstep on interest rate increases. This could introduce economic uncertainty or deteriorating economic conditions that are more difficult to reverse.
Learn more about high-yield savings, money market, and CD savings accounts.
The most immediate impact on the housing market during the shutdown is a slowing of services. “It’s still possible to obtain a government-backed loan from agencies like the FHA and VA,” Joseph Young, managing director at Mercer Advisors, said in an email interview. “But they’re operating with significantly reduced staff, so processing times and closing dates are likely to be interrupted.”
While FHA and VA loan applications may continue processing, any step requiring a manual review or federal verification — income checks or IRS transcripts — could be delayed. For some buyers, this setback can push a deal past its expiration date.
One loan program in particular, which supports lower-income and rural buyers, has been hit hardest. “USDA loans are the most affected, with a complete suspension of new loans issued,” Young said.
Read more: How a government shutdown impacts the housing market
Mortgage rates are impacted by government shutdowns, though not in direct or obvious ways. Specifically, mortgage rates could actually come down.
“When shutdowns occur, investors typically flock to Treasury securities, which pushes their yields down and can result in slightly lower mortgage rates — usually a drop of about 0.125 to 0.25 percentage points,” Cotality Chief Economist Dr. Selma Hepp told Yahoo Finance via email. “For instance, if the 30-year fixed mortgage rate is sitting at 6.375%, it might fall to around 6.125% during the shutdown.”
Other market factors can alter those expectations, including the interruption of vital economic reports the Federal Reserve counts on to set monetary policy, such as gauges of employment and inflation. So far, mortgage rates have inched down over the past few weeks. The decreases have been fairly small, but depending on how long the shutdown lasts, those gradual declines could add up to a more significant drop.
Read more: How does a government shutdown impact mortgage rates?
For the stock and bond markets, investor sentiment may be jarred in the short term — particularly if the shutdown affects the Fed’s rate-lowering agenda. Temporary market volatility may be the result. In other words, you might not want to check your 401(k) balance or mutual fund statements quite so often. Remember, your long-term investments will likely weather any week-to-week losses if you don’t sell during the shutdown.
The price of gold, which has reached new highs in 2025, is likely to remain strong. Gold is a safe-haven asset that can appreciate when stock prices falter or when economic conditions sour.
Interest payments on Treasurys will continue.
During the shutdown, nonessential federal employees won’t be paid until the government reopens. Contractors and private companies serving the government may institute temporary employment cutbacks.
Commissaries may be closed on most US military bases, and some regional offices of the Department of Veterans Affairs may be temporarily closed, yet benefits and VA hospitals are unaffected.
Other services: affected and unaffected
Here are more federal services and how they’re affected by a potential shutdown:
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Post office and mail delivery: Unaffected
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Federal courts: Will remain open
The IRS and tax collections: The agency will likely reduce staff, so the phones may not be answered — but payments will be collected.
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Source : Yahoo Finance
