H.R. 5816: Halting Education Loan Payments during Federal Employment Disruptions Act

This bill, known as the Halting Education Loan Payments during Federal Employment Disruptions Act, aims to provide specific protections for federal employees who face delays in their pay due to lapses in federal funding. Here are the primary components of the bill:

Definitions

• Federal Employee: Refers to individuals defined in U.S. law as federal employees, including those working in various government roles and judicial positions.
• Qualified Education Loan: Includes any student loan made, insured, or guaranteed under the Higher Education Act of 1965.
• Involuntary Disruption of Pay: This occurs when a federal employee does not receive their scheduled wages due to a government shutdown or funding lapse.

Protections Offered

• Waiver of Penalties and Late Fees: Federal employees will not incur any late fees or penalties for missed payments on qualified education loans during a period when their pay is disrupted.
• Waiver on Interest Accrual: During the period of pay disruption, additional interest will not accrue on qualified education loans for affected federal employees.
• No Adverse Credit Reporting: The Secretary of Education will ensure that no negative information regarding missed payments of qualified loans is reported to credit agencies due to the involuntary pay disruption.
• Retroactive Application: These protections apply retroactively to any instances of involuntary pay disruption occurring on or after October 1, 2025. The Secretary of Education will work to remove any negative credit information reported due to such disruptions.

Implementation

The Secretary of Education will be responsible for issuing the necessary regulations and guidance to implement this Act within 30 days of its enactment. This implementation will also require cooperation from other government departments and agencies, including the Office of Personnel Management and various congressional offices.

Compliance and Enforcement

Loan servicers and credit reporting agencies are required to fully cooperate with the Secretary of Education to ensure the provisions of this Act are upheld.

Miscellaneous Provisions

• Repayment Obligations: The bill does not absolve federal employees of their repayment responsibilities for their student loans. It only provides temporary relief from penalties and interest during specific circumstances.
• Severability: If any part of the Act is deemed invalid, the remainder of the Act will still be in effect.

Relevant Companies

None found