The GOP plan to avoid a government shutdown in 5 days could actually help student-loan companies struggling to manage repayment

  • The government will shut down after November 17 if Congress doesn't act.

  • House Republicans introduced a "laddered" approach to keep the government funded.

  • It includes flexibility for the Education Department to reallocate money to student-loan companies.

Republican lawmakers' latest plan to keep the government funded includes some flexibility for the Education Department as it manages a challenging return to repayment.

Over the weekend, Speaker of the House Mike Johnson released the text of a short-term continuing resolution meant to stave off a government shutdown after November 17. His proposal took the form of a "laddered" approach, in which Congress would extend government funding until January 19 on four spending bills, with the remaining eight bills — including Education Department funding — in a resolution extended until February 2.

"This two-step continuing resolution is a necessary bill to place House Republicans in the best position to fight for conservative victories," Johnson said in a statement. "The bill will stop the absurd holiday-season omnibus tradition of massive, loaded up spending bills introduced right before the Christmas recess."

The text of the legislation notably has some language that could work in the benefit of federal student-loan companies tasked with facilitating the return to repayment. In October, millions of federal borrowers once again started entering the repayment system after an over three-year pause, and the unprecedented transition has strained servicers, leading them to make a range of errors with borrowers' accounts.

Johnson's proposal would give the Education Department flexibility to allocate more funding to the servicers to better support borrowers for purposes including student loan servicing, customer servicing, and other loan processing operations.

The resolution would allow the department to reallocate other money in its budget toward loan servicing, and spend that money at a faster rate. The Education Department referred Insider to the Office of Management and Budget for a comment on the proposal. OMB did not immediately respond to Insider's request.

Still, Johnson's plan is not guaranteed to pass at this point. The legislation does not include the steep budget cuts many conservative lawmakers want, meaning Democrats will need to vote with Johnson to send the text to Biden's desk.

Conservative Rep. Chip Roy wrote on X, formerly Twitter, that "my opposition to the clean CR just announced by the Speaker to the @HouseGOP cannot be overstated. Funding Pelosi level spending & policies for 75 days - for future 'promises.'"

But over on the Senate side, some Democrats appear to be open to Johnson's solution if it means avoiding a government shutdown. Sen. Chris Murphy told NBC on Sunday that Johnson's proposal "looks gimmicky to me, but I'm open to what the House is talking about."

"The priority has to be keeping the government open and I think this is a moment where reasonable people in the Senate, and that's where most of the reasonable people are these days, have to make sure that we are not making the perfect the enemy of the good," he said.

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