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Debt Ceiling Deal Ends Freeze on Student Loan Payments for Millions

Debt relief activists are urging members of Congress and the Biden administration to strike the provision from the deal.

Advocates for student debt relief are raising the alarm over a controversial part of the bipartisan deal to raise the U.S. debt ceiling that would end the freeze on student loan repayments by the end of August. The moratorium has been in place since 2020. Meanwhile, the fate of the Biden administration’s plan to forgive up to $20,000 in student debt for borrowers is going to be decided by the Supreme Court, where it is likely to face skepticism from the conservative majority. “This is President Biden turning his back on student debtors,” says Braxton Brewington, press secretary of the Debt Collective.


This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: This is Democracy Now! I’m Amy Goodman, with Nermeen Shaikh.

We end today’s show looking at how the bipartisan deal to suspend the debt ceiling would end President Biden’s federal student loan payment pause, force payments to resume September 1st, and limit new student debt moratoriums. On Tuesday, Democratic Congressmember Ayanna Pressley filed an amendment to remove the section, saying, quote, “The pause on student loan payments has been life-changing for families across the country.”

For more, we’re joined by Braxton Brewington, press secretary of the Debt Collective, a group working to end the student loan crisis.

Braxton, welcome back to Democracy Now! We only have a few minutes. Can you respond to the passage of the debt ceiling legislation and how it impacts student loan?

BRAXTON BREWINGTON: This is President Biden turning his back on student debtors. What this provision in the debt ceiling does is essentially codify an end to the student loan pause, says not only should student loans — should student debtors have to resume payments on September 1st, but that the pause can never be extended again.

And so, what that risks is that, should June, this month, the Supreme Court rule against student debt relief, student loan borrowers are going to be in what could be the worst financial position they’ve ever been in, which is going through COVID, having a student debt crisis, but not having their student debt relief and having to resume costly payments.

NERMEEN SHAIKH: And, Braxton, if you could give a sense — I mean, what is the scale of the student debt crisis? And what impact is this likely to have on literally tens of millions of student debtors in the U.S.?

BRAXTON BREWINGTON: Student debt is the second-largest household debt type in the entire country. In 2019, someone — people defaulted on their student debt every 26 seconds. A million people a year defaulted on their student debt. Senior citizens had their Social Security checks garnished. Veterans had their wages garnished. People aren’t able to purchase a home. They’re not able to have children or start a small business or start a family.

And so, the crisis of student debt is a large one before COVID, now exacerbated by COVID, where people have lost their health insurance, their wages have been stagnated, or some have even declined. We’re looking at a situation now where people, after the pandemic, don’t actually have any relief because of student debt possibly not going through because of the Supreme Court. And that’s why the backstop of the pause is so important, because it’s really the only thing keeping student debtors afloat from not falling into financial decline.

AMY GOODMAN: So, what do you think can happen right now?

BRAXTON BREWINGTON: Well, the vote is set to go through soon on the Senate side, and we’re still pressuring members of Congress to vote “no” on the provision of codifying the end of the payment pause. And we’re also pressuring President Biden to uphold his promise to implement relief no matter what the Supreme Court says. This conservative court, which has, frankly, ignored the facts of this case through every step of the process — there was no fact-finding process — we’re nervous that the Supreme Court is going to ignore the rule of law, ignore reason, and rule against student debt relief.

What President Biden can then do is use other legal tools at his disposal to ensure that people get the relief that they’ve already applied for, that they’ve already been approved for, so that we don’t come out of COVID-19 where people are in such a really bad financial situation. The Biden administration should declare student debt an emergency on its own. There’s no reason for the Biden administration to put his hands behind his back and allow the Republicans to tie him to ending the payment pause and never being able to take action on this really important domestic issue again.

AMY GOODMAN: You tweeted, “If I were a reporter I would ask the White House what they will do if they sign a debt ceiling deal that permanently ends the student debt pause but the Supreme Court rules against student debt relief.” Have you posed this question to the Biden administration?

BRAXTON BREWINGTON: We have. And so far the Biden administration has said they remain confident in their case that they argued before the Supreme Court. I think our response to that is that the White House can’t see the future. And so, if we are in a scenario where this conservative Supreme Court, which we know several members of this court have been corrupted and even bribed — if we’re in a position where the Supreme Court rules against student debt relief, the Biden administration, because of this debt ceiling deal, will have removed their leverage in ensuring that student debtors are able to stay financially afloat.

And so, it’s not too late. The vote hasn’t happened yet. We’re encouraging members of Congress and the Biden administration to strike this provision from the deal, so that student loan borrowers are not in such a precarious, bad economic situation, akin to the student debt crisis before COVID.

AMY GOODMAN: Braxton Brewington, I want to thank you for being with us, press secretary of the Debt Collective, a group working to end the student loan crisis.

That does it for our show. Democracy Now! is produced with Mike Burke, Renée Feltz, Deena Guzder, Messiah Rhodes, María Taracena, Tami Woronoff, Charina Nadura, Sam Alcoff, Tey-Marie Astudillo. Special thanks to Julie Crosby. I’m Amy Goodman, with Nermeen Shaikh.

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