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Legislative bills

Federal Workers and Contractors Face Financial Hardship Amid Shutdown

Strategic Insights

— 2 min read

Amid the ongoing government shutdown, a group of lawmakers have introduced legislation to provide financial relief to federal workers and contractors, who are facing unprecedented hardship due to the stalemate. The Shutdown Student Loans for Feds Act would require the Department of Education to pause student loan payments for federal workers, including federal contractors and military personnel, in the event of a federal government shutdown lasting longer than two weeks.

Key Takeaways:

  • The Shutdown Student Loans for Feds Act would provide relief to approximately 494,000 federal workers and contractors in Maryland, and 34,000 uniformed military personnel.
  • The legislation would suspend student loan payments for federal workers, contractors, and military personnel, preventing interest from accruing and ensuring that borrowers remain in good standing for forgiveness programs like Public Service Loan Forgiveness (PSLF).
  • The bill has been endorsed by the National Federation of Federal Employees (NFFE), the National Treasury Employees Union (NTEU), the American Federation of Government Employees (AFGE), and the National Education Association (NEA).
  • Senator Edward J. Markey (D-Mass.) and Congresswoman Sarah Elfreth (MD-03) have introduced the legislation, which is cosponsored by Senators Mark Warner (D-Va.), Tim Kaine (D-Va.), Richard Blumenthal (D-Conn.), Cory Booker (D-N.J.), Mazie Hirono (D-Hawaii), Andy Kim (D-N.J.), Ben Ray Lujan (D-N.M.), Jeff Merkley (D-Ore.), Bernie Sanders (I-Vt.), Elizabeth Warren (D-Mass.), and Ron Wyden (D-Ore.).
  • The legislation would ensure that the pause for federal workers has no impact on credit reporting and would direct the Secretary to deem each month for which a loan payment was suspended as if the borrower had made a payment for the purposes of student loan forgiveness programs.
  • The bill aims to alleviate the financial burden on federal workers and contractors, who are already struggling due to the shutdown.

Statistics:

  • 494,000 federal workers and contractors in Maryland are affected by the shutdown.
  • 34,000 uniformed military personnel are also impacted.
  • The legislation would suspend student loan payments for approximately 1.5 million federal workers and contractors nationwide.
  • The pause would apply to all federal employees (furloughed and excepted), members of the military, and federal contractors.

Sources:

  • Senator Edward J. Markey (D-Mass.) press release
  • Congresswoman Sarah Elfreth (MD-03) press release
  • Senator Mark Warner (D-Va.) press release
  • National Federation of Federal Employees (NFFE) endorsement letter
  • National Treasury Employees Union (NTEU) endorsement letter
  • American Federation of Government Employees (AFGE) endorsement letter
  • National Education Association (NEA) endorsement letter

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