Included in the bipartisan bill to raise the debt ceiling that is about to become law (the Senate passed it late Thursday night; it now goes to the president’s desk) is a provision that has raised alarms from advocates for student loan relief.
While the debt ceiling deal codifies the White House’s plan to resume loan payments at the end of this summer, it also includes a provision that prevents the executive branch from further extending this pause on payments and interest without congressional approval.
Should the Supreme Court rule against the Biden administration’s plan to cancel up to $20,000 in student debt, as it’s expected to do later this month, the White House won’t have any obvious or immediate pathway to create debt relief for the 40 million Americans who would benefit.
That doesn’t mean that in a future emergency the White House would be unable to enact a moratorium again — but it does mean that student loan payments are really about to return.
Get ready to start paying back your loans
In effect, by the end of the summer, there is a very real chance that millions of student loans will not be canceled, that you will have to start paying back the loans you owe after more than three years of paused payments, and that debt will start to accrue interest again.
And the restart of payments isn’t likely to go off without a hitch. That means the potentially chaotic unpausing will all start to happen right before an election year.
“It’s worse [than before the pandemic] because people have been counting on relief and other possibilities have been foreclosed,” Astra Taylor, a co-founder of the Debt Collective, a union of debtors, told me. “So [this policy] is going to really hurt people who are coming out of this whole crisis worse off than they were in 2019. And now with this blow, the whole promise of relief is ‘Okay, we’re going to try to repair the damage’ and now it’s ‘We’re going to compound the damage.’”
As it…
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