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If you have student loans, here’s what the debt ceiling deal means for you

Get ready to pay back your loans — or pressure the White House for new action.

Bernie Sanders in a crowd, one holding a sign that reads “cancel student debt.”
Sen. Bernie Sanders (I-VT) waits to speak during a rally in support of the Biden administration’s student debt relief plan in front of the U.S. Supreme Court.
Drew Angerer/Getty Images
Christian Paz is a senior politics reporter at Vox, where he covers the Democratic Party. He joined Vox in 2022 after reporting on national and international politics for the Atlantic’s politics, global, and ideas teams, including the role of Latino voters in the 2020 election.

Included in the bipartisan bill to raise the debt ceiling that is about to become law (the Senate passed it late Thursday night; it now goes to the president’s desk) is a provision that has raised alarms from advocates for student loan relief.

While the debt ceiling deal codifies the White House’s plan to resume loan payments at the end of this summer, it also includes a provision that prevents the executive branch from further extending this pause on payments and interest without congressional approval.

Should the Supreme Court rule against the Biden administration’s plan to cancel up to $20,000 in student debt, as it’s expected to do later this month, the White House won’t have any obvious or immediate pathway to create debt relief for the 40 million Americans who would benefit.

That doesn’t mean that in a future emergency the White House would be unable to enact a moratorium again — but it does mean that student loan payments are really about to return.

Get ready to start paying back your loans

In effect, by the end of the summer, there is a very real chance that millions of student loans will not be canceled, that you will have to start paying back the loans you owe after more than three years of paused payments, and that debt will start to accrue interest again.

And the restart of payments isn’t likely to go off without a hitch. That means the potentially chaotic unpausing will all start to happen right before an election year.

“It’s worse [than before the pandemic] because people have been counting on relief and other possibilities have been foreclosed,” Astra Taylor, a co-founder of the Debt Collective, a union of debtors, told me. “So [this policy] is going to really hurt people who are coming out of this whole crisis worse off than they were in 2019. And now with this blow, the whole promise of relief is ‘Okay, we’re going to try to repair the damage’ and now it’s ‘We’re going to compound the damage.’”

As it stands, the Biden administration does not have any viable paths to provide student debt relief through Congress until after the 2024 presidential election. And the current Congress is actually hostile to any attempts.

A spokesperson for the president said on Thursday that Biden intends to veto the most recent attempt to block any loan relief: a resolution under the Congressional Review Act that would annul the administration’s student loan forgiveness plan and reverse the extension of the student loan pause passed the Senate Thursday with the support of independent Sen. Kyrsten Sinema of Arizona and Democratic Sens. Joe Manchin of West Virginia and Jon Tester of Montana.

Through the debt ceiling negotiations, Biden did manage to neutralize the threat House Republicans posed to his student loan forgiveness plan and preserved the power to enact moratoriums in future national emergencies, while codifying the existing plan to restart payments and interest at the end of the summer, Adam Minsky, an attorney who specializes in helping student loan borrowers, told me.

“Between that deal and vetoing the Congressional Review Act resolution, Biden halted the two paths that congressional Republicans were simultaneously using to try to repeal any student loan forgiveness. That resolution would have retroactively undone the extension of the current pause and could have resulted in the credit from forgiven public service loans being reinstated,” Minsky said.

But that threat for future action of student debt relief from future Congresses still exists, Taylor said, and heightens the imperative for the executive branch to act where the legislative branch won’t.

Taylor, and other advocates for more aggressive executive action, argue that there are other options for the White House to pursue additional debt relief, using the Higher Education Act, which grants the Education Department power to manage and govern the modern college funding system and “compromise, waive, or release” federal loans. They note that forgiveness is a standard part of programs that allow students to repay loans based on income, which are supposed to forgive the remaining loan balance after enough time has passed.

“Student debt cancellation by the Department of Education is actually hardly radical. It does happen all the time” Taylor said. Advocates hold that those various Plan Bs still exist — and that time is of the essence for the Biden administration to prepare those options.