Shutdown Student Loans for Feds Act
Summary
The "Shutdown Student Loans for Feds Act" aims to provide federal student loan relief to federal employees and contractors during government shutdowns lasting 14 days or more. It suspends loan payments, prevents interest accrual, and ensures that suspended payments are treated as if they were made for loan forgiveness programs. The bill also includes a retroactive effective date and allows for refunds of payments made during qualifying shutdowns.
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 also ensure that their progress towards loan forgiveness is not negatively impacted. The bill would require the Secretary of Education to manage the suspension of payments and reporting to credit agencies.
Potential Benefits
- Provides 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 towards loan forgiveness programs.
- Protects borrowers' credit scores by treating suspended payments as regular payments.
- Offers refunds for payments made during qualifying shutdowns.
Potential Disadvantages
- May increase the administrative burden on the Department of Education.
- Could create a precedent for similar relief measures during other types of emergencies, potentially straining federal resources.
- The cost of the program is not explicitly addressed, potentially impacting the federal budget.
- May incentivize individuals to seek federal employment for the potential of loan relief during shutdowns.
- Could be perceived as unfair to private sector employees who also face financial hardship during economic downturns.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's constitutional alignment is primarily based on Congress's power to legislate for the general welfare under Article I, Section 8. The Act does not appear to infringe upon any specific constitutional rights or limitations. The necessary and proper clause could be invoked to justify the specific mechanisms for implementing the loan relief program.
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).