After a lawsuit from the American Federation of Teachers, the Department of Education agreed to resume student-loan forgiveness for roughly 2.5 million borrowers enrolled in income-driven repayment and related plans, and to protect certain forgiven balances from tax treatment through year-end. The agreement also requires progress reports and reimbursements where borrowers overpaid, giving long-delayed relief to a large cohort of public-sector and low-income borrowers. At the same time, the federal government shutdown is increasingly disrupting higher education operations: universities report paused grants, threatened programs and emergency budgeting moves. Institutions such as Georgia Tech and the University of Hawaiʻi have cited cash pressures, and Head Start and other federally funded programs risk closures if the shutdown continues. The twin developments underline how litigation and political gridlock are reshaping administrative priorities and short-term cash management across campuses.