There are about 800,000 Federal employees that have been furloughed as a part of the longest government shutdown in history. The shutdown began on December 22, 2018. Our elected officials remain at a stalemate and there are no indications this situation will be resolved quickly.

Federal student loan borrowers should be OK through this period of reduced government services. The government shutdown is actually a partial government shutdown applying only to certain departments of the Federal government. It does not directly impact the U.S. Department of Education (DOE) or its contractors (including Servicers), all of which remain fully funded.

Deferment and Forbearance

Those federal government employees and contractors to the government that may be impacted by the shutdown need to be careful with deferment and forbearance decisions which allow borrowers to postpone payments. Interest payments that are not made can accrue and be capitalized.

The possible exception could be those federal student loan borrowers currently enrolled in an income-driven repayment program because the shutdown does impact the IRS. Student loan borrowers who need to access their prior tax returns or tax transcripts online to apply, or re-certify, for income-driven repayment plans should begin preparing earlier just in case. While IRS announced they do not anticipate any delays in processing 2018 tax refunds, they have not made any statements about access to records.

Higher Level Processing Clients – No Worries

Those borrowers which work with Higher Level Processing (HLP) have nothing to worry about. HLP Advisors have all the requisite expertise to help clients navigate forbearance decisions and HLP manages the recertification process on behalf of its clients.

Eliminating student debt – one client at a time