Washington, D.C. – Today U.S. Reps. Ed Perlmutter (D-CO-07) and Will Hurd (R-TX-23) introduced legislation to provide relief for student loan borrowers affected by the partial government shutdown. H.R. 781, the Student Loan Relief for Feds Act, would allow affected federal, state, and D.C. employees and contractors to apply for deferment on their students loan payments during a federal appropriations lapse.
Specifically, interest would not accrue on loans during the deferment period or for three months immediately following the shutdown. Additionally, borrowers would not be penalized for the temporary halt of their student loan payments and they would return to full loan repayment status within three months of the shutdown ending.
Student loan debt levels in the U.S. are at a record high, with roughly one in four American adults paying off student loans. Based on a recent survey from the Federal Reserve, a typical student loan payment is between $200 and $300 per month.
“Students and their parents who took out loans for higher education are already burdened with an enormous amount of debt. Requiring folks to pay a couple hundred dollars a month in student loan payments while their pay is withheld isn’t right,” said Perlmutter. “This bill provides much-needed financial relief at a time when many families are making difficult decisions to figure out how to make ends meet.”
“The least we can do during this shutdown is help protect 800,000 federal workers from suffering even more hardship by not being able to pay their costly student loan payments,” said Hurd. “I am proud to support this bill to help these federal employees and will continue to do all I can to reopen the government. Congress should never negotiate on the backs of hundreds of thousands of hardworking federal employees who continue to work without pay.”
The bill does not change the terms of the loan agreement between the lender and borrower beyond placing a pause on repayment while there is a lapse of government appropriations. The bill applies to all federal student loans as well as Parent PLUS Loans.
If the bill is signed into law while the government is still shutdown, student loan borrowers could immediately apply for deferment.