CHICOPEE, Mass. (WWLP) – The debt ceiling bill has been passed by the U.S. House of Representatives. It still has to make it through the Senate before it is set in stone, but current provisions would bring a definitive end to the student loan payment pause later this year.
Included in that text is an end to the student loan debt repayment holiday and language that prevents President Biden from issuing another last-second pause.
“Now that the pandemic is over and the Republicans control the House of Representatives, they want to reign in government spending and student loan forgiveness is one way to do that,” explained John Rogers, a Professor of Economics and Finance at AIC in Springfield.
The bill would require borrowers with federal student loans to begin repaying those again starting in August. The last required payment was back in March of 2020 and we all know how inflation has tightened budgets since then.
That would mean some 45-million Americans will have to come up with a few hundred extra dollars in already tight budgets, with the average payment before the pause standing at $460.
“I think it’s going to be difficult for a lot of people,” said Rogers, “That, along with the other cutbacks will begin to slow down consumer confidence and consumer spending. And, this famous recession that we have been predicting for two years may actually come to pass.”
With the pause ending, those millions of well-educated eyes will turn to the Supreme Court as they continue to mull over President Biden’s partial forgiveness plan which would cancel $10,000 of debt for those who make less than $125,000 a year and $20,000 for people who received Pell grants for low-income families.
A ruling from the court could come at any time but is expected within the next month. Congressional Republicans have vowed to block the plan if the courts do not.