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Senators Introduce Legislation to Pause Student Loans for Federal Workers During Shutdown

Strategic Insights

— 1 min read

Senators Angela Alsobrooks, Chris Van Hollen, and Congresswoman Sarah Elfreth have introduced legislation to pause student loan payments for federal workers, contractors, and military personnel during a government shutdown lasting longer than two weeks. The bill, called The Shutdown Student Loans for Feds Act, aims to provide financial relief to thousands of federal workers in Maryland who are experiencing unprecedented financial hardship due to the prolonged shutdown. The legislation has been endorsed by several unions and advocacy groups, including the American Federation of Government Employees, the National Treasury Employees Union, and the National Education Association.

Key Takeaways:

  • The Shutdown Student Loans for Feds Act requires the Department of Education to pause student loan payments for federal workers, contractors, and military personnel during a government shutdown lasting longer than two weeks.
  • The legislation would prevent loans from accruing interest during the shutdown period and ensure that borrowers continue to be in good standing for forgiveness programs like Public Service Loan Forgiveness (PSLF) and Student Loan Repayment Program (SLRP).
  • The pause would apply to all federal employees, including furloughed and excepted personnel, members of the military, and federal contractors.
  • The bill directs the Secretary to consider 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 Secretary is also authorized to issue a refund for a covered individual for any loan payment already made, if requested.
  • The legislation has been endorsed by several unions and advocacy groups, including the American Federation of Government Employees, the National Treasury Employees Union, and the National Education Association.

Statistics:

  • 494,000 federal workers and federal contractors live in Maryland, with 34,000 uniformed military personnel also residing in the state.
  • The average federal worker earns around $84,000 per year.
  • Estimate of the total number of federal workers affected by the shutdown is around 800,000.
  • Number of federal contractors affected by the shutdown is unknown.

Sources:

  • The Baltimore Sun: "Alsobrooks, Elfreth try to pause student loan payments for fed workers"
  • The Shutdown Student Loans for Feds Act (bill text)
  • Alsobrooks.senate.gov: "Senators Introduce Legislation to Pause Student Loans for Federal Workers"

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