For millions of Americans with federal student loan debt, the repayment holiday will soon end.
The bill to raise the debt ceiling and cut spending would have borrowers start paying off their loans again by the end of the summer, after a one-year grace period imposed by the coronavirus pandemic. contains a clause requiring that
President Biden has already warned that the moratorium will end around the same time, but if the bill is passed within days, he won’t be able to extend it again at the last minute, as he has done several times already. right.
The end of the moratorium will affect millions of Americans who take out federal student loans to pay for college. Nationwide, 45 million people owe $1.6 trillion in such loans, more than Americans owe any kind of consumer debt other than mortgages.
The economic impact of the pandemic has faded since President Donald J. Trump first suspended student loan payments in March 2020. Many Americans lost their jobs early in the public health crisis, undermining their ability to pay off their loans on time. U.S. employment numbers are now above pre-pandemic levels.
House Speaker Kevin McCarthy said on Fox News Sunday that he would push the debt ceiling bill over the weekend to end student loan suspensions “within 60 days of its signature.”
In fact, the bill would follow the same timeline previously outlined by the Biden administration, ending payment suspensions on August 30 at the latest.
A spokeswoman for McCarthy did not respond to an email requesting comment.
Even after the moratorium ends, some borrowers will still get some relief if the Supreme Court allows Mr. Biden to go forward with a plan to forgive up to $20,000 in debt for some people with outstanding balances. may be
Mr. Biden’s plan would forgive $10,000 of federal student loan debt for students earning less than $125,000 a year. Those who received the Pell subsidy for low-income households may qualify for an additional $10,000 in debt forgiveness.
However, the plan was challenged in court as an illegal exercise of executive power, and several judges expressed skepticism about the plan at oral arguments in February. A ruling from the court could come at any time, but is expected next month.
White House officials have repeatedly said they are confident in the legitimacy of the president’s plan. But the plan and broader student-loan issues are hotly debated in Congress.
Republicans have vowed to block the president’s plans if the courts don’t approve. But despite repeated attempts, they have so far failed to deliver on that promise.
House Republicans last month passed a bill to raise the debt ceiling that would block a plan to end student loans and lift the moratorium on payments. The bill was shelved after negotiations began with the White House on a debt ceiling and spending cuts.
last week the house passed a resolution It uses the Congressional Review Act to overturn the president’s debt cancellation plan. But the Senate has not taken up the bill, and Mr. Biden has said he will veto it.
Instead, the compromise debt ceiling bill currently being considered by lawmakers would only call for the suspension of payments to be lifted, and the president has already said he would take that step. It does not preclude a debt cancellation plan.
White House officials also said the bill would not deny the Biden administration the power to suspend student loan payments during future emergencies sought by Republicans.
A White House press secretary said the president was happy that Republicans were unable to block his debt cancellation plan with the debt ceiling bill.
“House Republicans have failed to deprive 40 million eligible borrowers, most of whom make less than $75,000 a year, of a penny in bailout,” said Abdullah Hassan. “The government announced in November that the current moratorium on student loans would end this summer. The deal does not change that plan.”
