Many congressional staff and some other federal employees are about to be on the receiving end of a surprise windfall set off by President Joe Biden’s sloppily designed and politically motivated executive action canceling student loans.

Just about one month ago, the White House announced its legally dubious plan to cancel half a trillion dollars in student loans. This long-awaited move came after a nearly two-and-a-half-year pause on student loan repayment initiated at the onset of the COVID pandemic. The move allowed for borrowers to have their recent payments refunded to them—addressing the fact that some borrowers paid off debt during the repayment pause that otherwise would have been forgiven.

The idea makes some sense, but it seems that the White House may have failed to think through how that would work for a particular group of borrowers: those working in the federal government already repaying their balances through a separate taxpayer-funded program. For some, the mechanics of the program will have taxpayers funding their loan cancellation, as well as writing them a big fat check to use on whatever they fancy. Here’s how it works.

Some federal employees, including those working in the Senate, the House, and for the various agencies, are eligible to receive an employment benefit that repays up to $10,000 of their student loans each year. Despite the pause on loan repayment spanning from March 2020 until today, these programs continued to make payments on employee balances.

And just like borrowers who repaid their loans with their own dollars during the repayment pause, beneficiaries of these programs can also ask for these funds to be refunded. But in this case, the funds won’t go back to the taxpayers who paid them. Instead, they go into the bank account of the borrowers (according to guidance published by the Department of Education). In cases where borrowers had their balance completely wiped away by cancellation, this combination of programs results in taxpayers paying off the borrowers’ loan balance twice; once to the Department of Education, and once in the form of a windfall payment to the borrower.

It’s a little hard to follow, so take this example. Imagine a Senate staffer who had a $20,000 federal student loan balance in March 2020. The staffer stopped making payments at that time, but they continued to earn benefits that paid their balance down to zero over the course of the pause on repayment. That borrower can now apply to have that $20,000 refunded to them and at the same time have their balance forgiven.

It’s not clear how many borrowers will satisfy the conditions necessary to be eligible for this windfall, but some signs indicate that it won’t be negligible. Reporting indicates that nearly 2000 congressional staff participate in their program and a recent report from the United States Office of Personnel Management indicates participation of over 9000 borrowers in the program for employees at federal agencies.

The sum of resources handed out through this glitch will be small relative to the scale of the overall giveaway. But it illustrates, once again, how poorly this sloppy effort to win votes rises to meet the actual policy needs of this moment.

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