The debt deal set a new date for student loan payments to resume

The wide-reaching bipartisan debt ceiling deal approved by Congress this week includes a provision that prevents the Biden administration from extending the pause on federal student loan repayments. For federal student loan borrowers, that means they may have to restart payments in a few months. According to the 99-page bill, repayments will resume 60 days after June 30, which is Aug. 29.

For the more than 40 million Americans who hold federal student loans, the restart of payments is “going to be really jarring for families that haven’t had to worry about student loan payments for more than three years,” said Mike Pierce, the executive director of the Student Borrower Protection Center.

The pause, first put in place in March 2020 by former President Donald Trump, “has been a lifeline for working families that have struggled to get their financial footing as we come out of this once-in-a-century pandemic. A once-in-a-generation economic crisis,” Pierce told the PBS NewsHour’s Nicole Ellis.

Watch the conversation in the player above.

He says that while there are options for people who cannot afford their monthly payments, they can be difficult to access because they require identifying and contacting the private financial services companies the government hires to manage student loans. Lenders may also not be prepared to begin collecting payments again, he said. “There has been this long effort to try to get the private companies at the center of the student loan system to do better by borrowers. But it’s in progress, and we haven’t gotten all the way there yet,” Pierce said.

READ MORE: Here’s how to prepare to start paying back your student loans when the freeze ends

The pause in student loan payments is “wildly popular public policy,” Pierce said. Half of voters in a March survey from Morning Consult/Politico approved of extending the pause, which at the time was set to expire May 1. But, in an effort to make a deal on lifting the debt limit and avoid a catastrophic default, the pause was put on the chopping block.

The Senate on Thursday night went a step further, voting to advance a GOP measure overturning a separate student loan cancellation plan from President Joe Biden, which offered up to $20,000 in federal student loan relief for borrowers who qualified. The White House is expected to veto that measure.

WATCH: Student debt relief is in legal limbo, but advocates still have a ‘toolbox’ of solutions

The plan has been challenged in the courts. The Supreme Court took up the case in February, and is expected to issue a ruling by the end of the term.

We're not going anywhere.

Stand up for truly independent, trusted news that you can count on!