If Republicans have their way in the debt ceiling face off, the federal student loan payment pause will officially come to an end later this year.
After months of will-they-wont-they, President Joe Biden and House Speaker Kevin McCarthy came to a tentative agreement on raising the debt ceiling limit over the weekend. Under that agreement, the end of the federal student loan payment pause would be codified into law. It would require payments to resume at the start of September, more than three years after the initial freeze began at the start of the COVID-19 pandemic.
While Republican leaders are making much ado about ending the pause, the timeline would actually not change from the Biden administrations current plan: The president previously announced student loan bills would once again be due 60 days after the U.S. Supreme Court reaches a decision on his forgiveness legislation, or 60 days after June 30, whichever is first.
The pause is gone within 60 days of this being signed, Republican House Speaker Kevin McCarthy said on Fox News Sunday. So that is another victory because that brings in $5 billion each month to the American public.
The difference now is that the debt ceiling legislation would make the end of the payment pause official, with no last-minute extension. So far, the Biden administrationand the Trump administration before ithas extended the pause multiple times, even after previous pronouncements of it coming to an end. Some Republicans say the current student loan provision of the agreement doesnt go far enough.
While nothing would technically change from the current repayment timeline, it does dash the hopes of some student loan borrowers who have said Biden should extend the payment pause once again if the Supreme Court overturns his widespread forgiveness plan. Republicans want to quash that possibility.
It is still possible that qualifying federal borrowers could benefit from up to $20,000 in debt cancelation, depending on what the Supreme Court decides. That decision is expected by the end of June, but could come sooner.
Republicans have been opposed to the debt forgiveness plan from the start and have made many efforts to repeal it. Last month, Republicans passed a debt ceiling bill that would have prohibited the U.S. Department of Education from pausing payments in the future, but it didnt go further than that. And just last week, House Republicans passed a resolution that would have blocked Bidens forgiveness plan. But it wont go any further with Senate Democrats and Biden.
The debt ceiling legislation needs to be approved by Congress before it heads to Biden for the final sign off, and McCarthy still needs to convince some Republicanswho wanted more concessions from the presidentto get onboard with the deal. But he said the House could vote on the legislation as soon as Wednesday, to get it to the president before the U.S. reaches the so-called X-date when it could default on its debt obligations.
