Shutdown Student Loans for Feds Act
Summary
The "Shutdown Student Loans for Feds Act" aims to provide federal student loan relief for federal employees and contractors during government shutdowns. Specifically, it mandates the Secretary of Education to suspend loan payments for covered individuals during lapses in appropriations lasting 14 days or more. The bill also ensures that interest does not accrue during these suspension periods and that suspended payments are treated as if they were made for loan forgiveness program eligibility.
Expected Effects
If enacted, this bill would temporarily alleviate the financial burden on federal employees and contractors with student loans during government shutdowns. It would prevent interest accrual and ensure continued progress toward loan forgiveness programs. The Act is set to take effect retroactively as if enacted on September 30, 2025, and allows for refunds of payments made during qualifying shutdown periods.
Potential Benefits
- Provides immediate financial relief to federal employees and contractors during government shutdowns.
- Prevents interest from accruing on student loans during the suspension period.
- Ensures that suspended payments count toward loan forgiveness programs.
- Offers potential refunds for loan payments made during qualifying shutdown periods.
- Reduces financial stress and improves the morale of affected federal workers.
Potential Disadvantages
- May increase the administrative burden on the Department of Education.
- Could potentially incentivize government shutdowns by reducing the immediate financial impact on federal employees.
- May create a perception of unfairness among taxpayers who do not receive similar benefits.
- The cost of suspended payments and refunds would need to be absorbed by the government, potentially impacting other programs.
- The retroactive effective date could complicate implementation and require significant resources for processing refunds.
Most Disadvantaged Areas:
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution (Preamble), as it aims to support federal employees during times of economic uncertainty caused by government shutdowns. Article I, Section 8 grants Congress the power to collect taxes and provide for the general welfare of the United States. However, the specific implementation and financial implications would need to be carefully considered to ensure fiscal responsibility.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).