By Carson Swick
Baltimore Sun
(TNS)
Maryland lent more than $2.4 million to federal workers impacted by this fall’s record-breaking government shutdown. Still, the state had recovered less than 4% of those funds by mid-December, according to the Maryland Department of Labor.
The loans were issued through the Federal Shutdown Loan Program, which Gov. Wes Moore announced in early October as Washington Democrats and Republicans dug in for what turned into a six-week stalemate over funding.
Under the program, Maryland federal employees who were required to work without pay were eligible for a $700 interest-free loan, to be paid back within 45 days of the government reopening. The state announced a second round of $700 loans in early November for these workers and extended the repayment deadline for all loans to Jan. 26, 2026—75 days from the end of the shutdown. The shutdown lasted 43 days, from Oct. 1 to Nov. 12.
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Department of Labor spokesperson Dinah Winnick told The Baltimore Sun that the state approved 2,082 applications for the first round of loans and 1,399 applications for the second round. Of these 3,481 total loans all valued at exactly $700, Winnick said on Dec. 16 that 137 repayments had been received—or $95,900 of the $2,436,700 in funds lent by the state.
“Loan recipients have until Jan. 26, 2026, to submit repayment,” Winnick told The Sun. “Loan recipients who have not repaid [by] that point will receive a series of reminder messages prior to being transferred to the [Maryland Department of Budget and Management’s] Central Collections Unit.”
Baltimore economist Anirban Basu, the CEO of Sage Policy Group, believes it is unlikely that the state will recover all loans it issued to federal employees. He noted potential difficulties in doing so, such as the cost of administering the loan program and tracking down workers who may have left their jobs and moved out of Maryland for more stable employment since the shutdown.
“It was a very kind gesture. It is clear that many Marylanders were in need,” Basu said of the loans. “However, it also results in this administrative burden, which is another cost to the taxpayer irrespective of whether or not the loans are recovered.”
While he suggested the roughly $2.34 million in outstanding loan balances is not enough to significantly impact the anticipated $1.4 billion budget deficit that Maryland lawmakers will have to solve this winter, Basu said the state should be “on principle, quite aggressive” in collecting the money. One “very effective” way to do this, Basu told The Sun, would be for the state to add any outstanding balances to a worker’s state tax bill.
“Maryland taxpayers offered these folks a loan. The loan was accepted,” Basu said. “And now, I think the taxpayer deserves to have that loan repaid, irrespective … of the administrative burden of collections.”
Winnick previously said the Department of Labor will pursue collections by sending 30-, 60-, and 90-day notices. The Maryland Department of Budget and Management’s Central Collections Unit will then be empowered to establish payment plans for delinquent borrowers.
Photo credit: RebeccaDLev/Shutterstock
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©2025 Baltimore Sun. Visit baltimoresun.com. Distributed by Tribune Content Agency LLC.
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