President Joe Biden and House Speaker Kevin McCarthy reached a debt ceiling agreement on Sunday that would resume student loan payments and interest accrual in late August.
Within 60 days of this being signed, the moratorium will be over, McCarthy assured Fox News host Shannon Bream. “So that’s another win because it gives the American people $5 billion every month,” you could say.
The debt ceiling would be suspended as part of the Biden-McCarthy agreement until January 2025. The proposal will now be voted on by Congress.
Are Student Loan Payments Still on Hold?
Yes. Since the start of the outbreak, payments and interest on student loans have been suspended; this moratorium was first imposed and extended under previous President Donald Trump and then renewed under Biden.
However, that won’t last for very long. Pressure to lift the ban has been increasing on the Biden administration, whose massive student loan forgiveness plan is currently being challenged in the Supreme Court.
Student loan payments were being resumed even before the agreement on Sunday.
The payments would be stopped as well as Biden’s larger plan to forgive up to $20,000 in student loan debt for Americans with individual incomes of less than $125,000, according to a bill that was approved by the House last Wednesday.
Prior to that, in March, the student loan refinancing company SoFi filed a lawsuit against the federal government to challenge the suspension.
The tweet below confirms the news:
Comment with a blue 💙 heart if the media should give President Biden CREDIT for the debt ceiling deal! pic.twitter.com/ak74q1RP1h
— Nathalie Jacoby (@nathaliejacoby1) May 28, 2023
The Education Department is Getting Ready to Resume Student Loan Payments
Miguel Cardona, the secretary of education, has emphasized that the moratorium has a deadline.
The secretary stated that debtors should get ready to resume payments no later than 60 days after June 30 or after the Supreme Court issues its ruling on the two cases challenging Biden’s comprehensive relief proposal in a hearing before the Senate Appropriations Committee in May.
Cardona stated at the hearing that “the emergency period is over, and we’re preparing our borrowers to restart.”
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Internal Education Department documents, as published by Politico, suggest that the process may not resume until at least October. The records state that department officials expect the shift back to payments to take several months.
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