The debt ceiling deal hammered out by President Joe Biden and Speaker Kevin McCarthy ends the pandemic-driven pause in student loan payments that’s been in place for more than three years while preserving Biden’s loan forgiveness plan — at least for now.
But the GOP is pressing ahead with its effort to derail the president’s plan, which would forgive up to $10,000 in student loan debt for those who meet income limits, and another $10,000 for those who got Pell Grants.
The Senate on Wednesday voted to take up a joint resolution of disapproval that would block the forgiveness plan. The measure passed the House last week with the support of every Republican and two Democrats: Reps. Jared Golden of Maine and Marie Glusenkamp Perez of Washington.
A vote on final passage is set for Thursday, but the White House has said Biden would veto the measure if it reaches his desk. The ultimate test for the proposal, however, may be determined by the Supreme Court, which heard arguments in February on a pair of challenges. Justices are expected to issue a ruling before the end of June.
The agreement announced over the weekend to raise the debt ceiling and cut government spending doesn’t block Biden’s loan forgiveness plan, despite Republican attempts to incorporate such a provision into the legislation. The White House views that as a victory. The deal faces a House vote on Wednesday.
“The bottom line here is that there are hardly any changes on the student loan front,’’ Bharat Ramamurti, deputy director National Economic Council, said on a call with reporters Tuesday. “The original Republican bill called for revoking the entirety of the president’s one-time student loan debt relief program… It called for repealing or rescinding the administration’s income-based repayment reforms that would make monthly payments much more manageable for student loan borrowers. Neither of those are in this final deal.”
The legislation codifies what Biden had already proposed: ending the freeze on loan payments by Sept. 1. The pause was first instituted by former President Donald Trump in March of 2020 and has been extended several times. The bipartisan agreement bars Biden from issuing another extension of the current pause, but Ramamurti said it “does not preclude the president from using his existing legal authority to initiate other pauses in the future if they are justified.”
Ending the pause means millions of Americans who borrowed money to pay for college tuition would see their payments resume. About 26 million people have applied for the loan forgiveness program and more than 16 million applications were approved, according to a fact sheet prepared by the White House.
Rep. Pramila Jayapal, a Democrat from Washington who leads the Congressional Progressive Caucus, said she’d like to see some sort of extension to allow people time to adjust.
“Our belief is that there needs to be some time to at least extend the pause,’’ Jayapal said, “until the administration can get their other debt repayment plan sort of up and running so that people aren’t being thrown into this limbo or back-and-forth seesaw of ‘you don’t need to pay your bills, your student debt payments,’ ‘now you need to pay them,’ ‘now you don’t need to pay them.’”
Activists pressing for student loan relief said the issue should have never been part of the debt ceiling discussion.
“These are real people that are impacted by this,’’ said Melissa Byrne, founder of We, The 45 Million, an advocacy group for student loan relief. “People are experiencing extreme mental health stress because they’re watching people play politics with their financial security. Twenty million people with student loan debt live in Republican districts and [Republicans] are hurting their own voters just to own the libs.’’
Ellyn Ferguson and Lindsey McPherson contributed to this report.