Yes, if it is a fungal infection they usually survive, as long as there aren't other health issues going on. Do the squirrels appear to have wrinkled, crusty skin, particularly around the head and face? That would indicate mange rather than a fungal infection. If you discontinue feeding (a good idea if there is mange in the local population), slowly decrease the amount of food you put out over a two week period. This gives the squirrels a chance to find other sources of food. If you keep feeding the squirrels, several small feeding stations spread out on the property are better than one large feeding station that will attract many animals to one area.