The bipartisan agreement between President Biden and House Speaker Kevin McCarthy to waive the debt limit until after the 2024 elections will have a big impact on student loan borrowers.
The deal stipulates that the federal government must restart requiring payments for all student loan borrowers after Aug. 29. It also stipulates the education secretary cannot extend the pause on student loan payments without the approval of Congress.
“That brings in $5 billion each month to the American public,” said Mr. McCarthy, California Republican.
Former President Donald Trump instituted the moratorium to give student loan borrowers relief at the height of the coronavirus pandemic, when many businesses closed and people were laid off.
The move allowed tens of millions of individuals with student loans the chance to pause repayment without accruing additional interest.
Mr. Biden has not only kept the moratorium in place, but has also extended it multiple times.
The White House announced last November, however, the pause would end this year — either after June 30 or once the Supreme Court had a chance to rule on th constitutionality of Mr. Biden’s plan to cancel between $10,000 and $20,000 in student debt for all Americans.
Administration officials say that Mr. Biden agreed to end the moratorium because it was already set to expire, while rebuffing GOP calls to cancel his broader student loan forgiveness plan.
“President Biden protected the student debt relief plan in its entirety,” the White House said in a statement. “The Administration announced back in November that the current student loan payment pause would end this summer — this agreement makes no changes to that plan.”
Not everyone sees the decision as a win.
Progressive Democrats had hoped that Mr. Biden would continue extending the moratorium indefinitely.
The Congressional Progressive Caucus says opting to end the pause is problematic since the constitutionality of Mr. Biden’s broader forgiveness program is still in flux.
“Our belief is that there needs to be some time to at least extend the pause 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,” said Rep. Pramilia Jayapal, Washington Democrat and Progressive Caucus chair.
Ending the moratorium is only one part of the bipartisan debt limit agreement struck by Mr. Biden and House Republicans.
The agreement would waive the $31.4 trillion debt limit until after the 2024 presidential election, claw back billions of dollars in unspent pandemic relief, and cut IRS funding. It would also cap federal spending growth at 1% next year.
“The agreement protects my and congressional Democrats’ key priorities and legislative accomplishments,” Mr. Biden said.
Mr. McCarthy and Mr. Biden have agreed to streamline the federal permitting process for new energy projects. The deal includes a pay-as-you-go provision requiring Mr. Biden to offset any rules or regulations that increase federal spending.
The agreement would expand work requirements for recipients of food stamps and direct cash payments. Able-bodied, childless recipients of each program 54 and younger would have to work at least 20 hours per week to keep their benefits. The work requirements would expire in 2030.
“We made good policies in here,” said Mr. McCarthy. “Work requirements will change people’s lives.”
• Haris Alic can be reached at halic@washingtontimes.com.
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