S. 3070: Shutdown Student Loans for Feds Act (119th Congress) Bill Summary

This bill, titled the Shutdown Student Loans for Feds Act, aims to provide relief for federal employees who have student loans during times when the government experiences a lapse in appropriations (i.e., when there is a government shutdown). Here are the main components of the bill:

Definitions

The bill defines several terms relevant to its provisions:

Agency: Refers to any authority within the executive, legislative, or judicial branches of the U.S. Government.
Covered Individual: Includes employees of an agency, regardless of whether they are determined to be excepted employees or furloughed during a shutdown. This category also encompasses contractors who typically support agency employees but do not provide these services during a government shutdown.

Relief During Government Shutdowns

During any fiscal year in which there is a government shutdown lasting 14 days or longer, the Secretary of Education will suspend all loan payments due from covered individuals for certain federal student loans.

No Accrual of Interest

While payments are suspended, no interest will accrue on these loans, which helps protect the borrower from additional financial burdens during the stoppage.

Consideration of Payments for Loan Forgiveness

Months during which loan payments are suspended will be treated as if the covered individual had made regular payments. This is significant for those borrowers seeking loan forgiveness under federal programs.

Reporting to Consumer Agencies

Payments that are suspended will be reported as if they were regularly scheduled payments to consumer reporting agencies. This provision ensures that borrowers' credit ratings are not negatively impacted due to the suspension of payments during a government shutdown.

Effective Date and Refunds

The bill will take effect retroactively as if it had been enacted on September 30, 2025. Furthermore, the Secretary of Education has the authority to issue refunds for any payments made by covered individuals during the specified period of a government shutdown, provided these refunds are requested by the individuals.