The debt deal outlines that the pause ends 60 days after June 30 and removes the possibility of another extension, which advocates were hoping to extract from President Biden.
Biden had outlined in November that payments would resume either 60 days after the Supreme Court rules on his student loan forgiveness plan or 60 days after June 30, whichever came first. But the final bill text doesn’t factor in the high court decision at all.
The locked-in date is causing fury among student loan advocates who were looking for another reprieve and creates more concerns for borrowers as the bill faces hurdles on its way through Congress.
Shalanda Young, director of the Office of Management and Budget, said the bill “does end the payment pause but very close to the time frame we were going to end it as an administration when it comes to repayment,” likely referring to Biden’s original plan to restart payments based off the Supreme Court decision if it was released before June 30.
“[T]his rule was intended to really tie payments to true income. Look, it matters to people whether they pay $50 or $500 a month,” Young said about protecting the option in the bill.
But while the administration is characterizing protecting income driven repayments as a win and downplaying the concession of the student payment pause, some still feel slighted.
“To be just frank, it feels like they’re screwing us over with a smile,” Abrams said.
“Trying to say you’ve won here when, in fact, for so many borrowers, that payment pause has actually been by far more relief for borrowers that owe $100,000 or $200,000 than the one-time debt cancellation — and plus a lot of people don’t have faith in that,” she added.
However, the fate of that relief is still at the mercy of a conservative-led Supreme Court whose members displayed much skepticism during February oral arguments that the Biden administration has the power to forgive up to $20,000 in student loans. The situation is still very volatile, as some Republicans have expressed discontent with the deal Speaker Kevin McCarthy (R-Calif.) and Biden reached, extending the stressful situation for the 40 million student borrowers who have been on a roller coaster since Biden announced student debt relief last August.
