Global Courant 2023-06-01 01:43:32
House Speaker Kevin McCarthy, R-Calif., arrives at the Capitol on May 31, 2023.
Sarah Silbiger | Bloomberg | Getty Images
Borrowers, lawyers and progressives don’t want the student loan payment pause to end.
But that’s part of the debt ceiling agreement, which could be voted on and approved this week. A provision would officially end its stay on the accounts in September.
Proponents warn that ending aid could have disastrous financial consequences for millions of Americans, especially if the Supreme Court blocks President Joe Biden’s student loan forgiveness plan. The judges are likely to scrap the policy, experts say, given their conservative majority. A decision is expected in June or July.
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“This deal deprives the White House of the ability to extend the current payment freeze if the Supreme Court cuts aid, making it more likely that 40 million people will have to pay back loans the president promised were canceled,” said Astra Taylor, co-founder. of the Guilt collectivelya union of debtors.
Proponents of ending the pause say the pandemic has largely been resolved and keeping tens of millions of Americans in the dark about their debt obligations could pose risks to both consumers and lenders.
Student loan payment break is a ‘sustainably popular’ policy
As of March 2020, the U.S. Department of Education allows most people with federal student loans to default on their debt without accruing interest. Most of the borrowers took advantage of the opportunity.
“The break in student loan payments remains one of the most enduringly popular pieces of economic policy as the American people recognize what Washington has long been trying to understand: the student loan system is broken,” said Mike Pierce, executive director of the Student Borrower Protection. Centre.
About 60% of voters wants the pause on student loan bills extended if Biden’s sweeping pardon plan is blocked by the U.S. Supreme Court, a new poll shows.
The Biden administration has warned that resuming student loan payments without executing its debt cancellation plan could trigger a historic spike in defaults and delinquencies due to the economic hardship caused by the pandemic and borrowers’ confusion over what they owe .
In exchange for votes to raise the country’s debt ceiling, Republicans had demanded major cuts in federal spending.
As part of the negotiations, they also sought to withdraw Biden’s executive action granting student loan forgiveness. But the Biden administration refused to agree, and the ongoing legal battle over the plan left any legislation potentially up for debate.
Under deal, break ‘will no longer be effective’
This deal deprives the White House of the ability to extend the current payment freeze if the Supreme Court drops the relief.
Astra Taylor
co-founder of the Debt Collective
As part of the deal, the U.S. Department of Education would also be limited in its ability to renew this particular waiver, with another extension likely only possible through Congress.
Representative Ayanna Pressley, D-Mass., tabled an amendment On Tuesday, that would make the provision ending the break, but her proposed change was not included in the final bill.
“Republicans continue to play games with our economy, with disdain for our most vulnerable families,” Pressley said in a statement.
White House spokesman Abdullah Hasan defended the president’s negotiations on behalf of the borrowers, pointing out that the government planned to end the break this summer anyway.
“This agreement does not change that plan,” Hasan said.
Correction: Rep. Ayanna Pressley, D-Mass., introduced an amendment on Tuesday that would remove the debt ceiling provision, ending the pause on student loan payments. An earlier version had misjudged the day.
This is an evolving story. Check back later for updates.
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