Sponsors (16)
The bill provides targeted financial and credit protections for federal employees and qualifying contractors during prolonged government shutdowns, at the cost of added administrative burden, taxpayer expense, and unequal treatment of non-covered borrowers.
Covered federal employees and qualifying government contractors have their federal student loan payments suspended during agency shutdowns of 14+ days; interest does not accrue during the suspension and those months are reported to credit bureaus as on-time payments, protecting borrowers' immediate finances and credit.
Suspended months count as qualifying payments toward loan forgiveness programs (e.g., PSLF/Part D), preserving progress toward forgiveness for covered borrowers who experience shutdown-related payment suspensions.
Borrowers who made payments during qualifying lapse periods can request retroactive refunds, restoring funds to those who paid despite a shutdown and correcting their account balances.
The relief is limited to 'covered individuals' (federal employees and certain contractors), excluding private-sector borrowers and many other public servants and creating unequal treatment among borrowers.
Expanding loan relief for covered individuals increases federal administrative costs, which could raise demands on taxpayers or require DOE resources to be reallocated.
The retroactive effective date and required adjustments to past reporting and payments could complicate records and require DOE and loan servicers to make extensive corrections, creating short-term administrative confusion.
Based on analysis of 2 sections of legislative text.
Suspends payments and interest and counts suspended months as qualifying for forgiveness for federal employees and certain contractors during agency funding lapses of 14+ days, retroactive to Sept 30, 2025.
Introduced October 29, 2025 by Angela Deneece Alsobrooks · Last progress October 29, 2025
Suspends federal student loan payments, stops interest from accruing, counts suspended months as qualifying payments toward forgiveness, and treats those months as on-time for credit reporting for federal employees and certain contractors who are unable to work because their agency had a funding lapse of 14 days or more in FY2026 or later. The relief is retroactive to September 30, 2025, and the Education Department may refund payments already made during qualifying lapse periods if borrowers request a refund.