What The Debt Ceiling Deal Means For Student Loan Borrowers

A bipartisan debt ceiling deal would crush borrowers’ hopes for a ninth extension of the state’s student loan moratorium.

Debt Ceiling ( Photo: Bankrate )

Paid vacation is coming to an end for millions of Americans with federal student loan debt

The Biden administration has repeatedly said the pandemic-related suspension of federal student loans will end later this year, but officials have said so before and then extended the suspension again. This time, Education Secretary Miguel Cardona may not be able to do so. The agreement to address the debt limit includes a provision that specifically prevents him from extending the pause on payments again, according to the bill text.

Republicans have vowed to block the president’s plans if the courts don’t approve. However, it has so far been unable to keep this promise

About 44 million people will have to start paying their federal student loans again when the hiatus ends later this year, but there are concerns that the process will go smoothly. Many people are wondering how much debt they have and when and how to pay it off. Millions of borrowers will have their student loans managed by another service provider after the last payment and late payments may incur fees. Those plans, which set payments based on income and family size, can lower monthly payments but require borrowers to submit some paperwork.

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