Students and family members of former students are being told they can’t access their federal student loans until the government takes steps to resolve the crisis in the U.S. financial system.
President Donald Trump signed an executive order Tuesday aimed at closing the loophole, but the move has left many borrowers unable to pay their debts.
The Department of Education has said it will continue to make payments on the outstanding student loans through July 31, and the agency is seeking $25 billion in additional funding from Congress to cover the cost of the payments.
The move to stop the payments has frustrated thousands of students who are scrambling to keep up with their student loan payments, but some are still trying to get their debts forgiven.
The Associated Press spoke with people affected by the student loan shutdown, including some students who had loan amounts that would allow them to pay off their student loans.
The AP reached out to a handful of former student loan borrowers who said they had not received their payments.
One man, who asked that his last name not be used because he has not received payment, said he had a $40,000 student loan.
He said he didn’t know how long it would take to get a new loan but he knew he needed to get his payments in.
The man said he paid off his student loans on his own through an installment loan and then used the money to pay for his home.
He said he was told the new rules are being implemented by the Federal Reserve, but he was still awaiting confirmation from the agency.
He asked not to be identified because he feared retribution from creditors.
Some former student loans are not eligible for the Federal Stafford loan forgiveness program because they were discharged by the borrower’s lender.
The program helps borrowers with a variety of student loans, including those with loans in default.
Federal Reserve Chairman Jerome Powell said Monday the Federal government is “committed to supporting those who are most in need.”
But he added that the Federal Open Market Committee has been working to find ways to provide relief for the millions of borrowers who owe the government money.
Powell said he is “deeply concerned” about the impact the closure of the student loans could have on borrowers who have outstanding student loan balances.
The FOMC has said the Federal Government has provided over $5 trillion to the U