what is in the debt celing deal for student loans?

Speaker McCarthy says student loan payment pause 'gone' under debt ceiling deal. Here’s what that means.

The debt ceiling deal finalized between President Joe Biden and House Speaker Kevin McCarthy on Sunday would reinstate student loan payments and the accrual of interest in late August. "The pause is gone within 60 days of this being signed," McCarthy said on Fox News, though the legislation, as with existing plans to sunset the pause, actually stipulates a timeline of 60 days after June 30. "So that is another victory because that brings in $5 billion each month to the American public." The Biden-McCarthy deal would suspend the debt limit until January 2025. The plan now heads to Congress for a vote. 'TWO VERY DIFFERENT PLACES':As Supreme Court gears up to rule on student loan cases, Americans are split on debt forgiveness Are student loans still deferred? Yes. Student payments and interest have been on pause since the onset of the pandemic, a moratorium first adopted and extended under former President Donald Trump and then extended again under Biden. But that won’t be the case for long. The Biden administration, whose mass student debt forgiveness plan is currently held up in the Supreme Court, has faced mounting pressure to lift the moratorium. Even before Sunday’s deal, efforts were underway to bring student loan payments back. A bill that passed out of the House last Wednesday would end the payments as well as Biden’s broader plan to relieve up to $20,000 in student loan debt for Americans with individual incomes of less than $125,000. Before that, in March, the student loan refinancing company SoFi sued the federal government over the pause, seeking to end it. BIDEN'S STUDENT LOAN FORGIVENESS PLAN:Lawsuit filed to end student loan payment pause Education Department prepares for return to student loan payments Education Secretary Miguel Cardona has stressed the moratorium has an expiration date. In a Senate Appropriations Committee hearing in May, the secretary said borrowers should prepare to start making payments again no later than 60 days after June 30 or after the Supreme Court issues its decision on the two cases challenging Biden’s broad relief plan. "The emergency period is over, and we’re preparing our borrowers to restart," Cardona said in the hearing. But as reported by Politico, internal Education Department documents indicate it could be until October at the earliest that the process resumes. According to the documents, department officials anticipate needing several months to transition back into payments. In a statement, a White House official said Biden "protected the student debt relief plan in its entirety," including that for mass forgiveness and for improvements to income-driven repayment options. "The administration announced back in November that the current student loan payment pause would end this summer — this agreement makes no changes to that plan," the official said, noting Biden retained his administration's "authority to pause student loan payments, as appropriate, in the event of future emergencies." *************************** for complete article go to:https://www.usatoday.com/story/news/education/2023/05/28/debt-ceiling-deal-student-loan-debt-payment-pause/70266126007/

The Biden Administration’s Student Loan Debt Relief Plan

Part 1. Final extension of the student loan repayment pause Due to the economic challenges created by the pandemic, the Biden-Harris Administration has extended the student loan repayment pause a number of times. Because of this, no one with a federally held loan has had to pay a single dollar in loan payments since President Biden took office. The Biden-Harris Administration’s one-time student debt relief plan is necessary to address the financial harms of the pandemic, provide borrowers with a smooth transition back to repayment, and help borrowers at highest risk of delinquency or default once payments resume. While litigation is preventing us from providing the relief needed to avoid these harms, we don’t think it’s right to ask you to pay on loans you wouldn’t have to pay were it not for the lawsuits challenging the program.

The Supreme Court heard arguments in February 2023, and we’re hopeful the Court will rule in the Administration’s favor and allow us to move forward with the debt relief program. The pause will end 60 days after the Supreme Court makes a decision on the case. If no decision has been made by June 30, 2023, payments will resume 60 days after that. Visit StudentAid.gov/coronavirus regularly for the latest information on the payment pause and other COVID-19 relief.  Frequently Asked Questions Do I need to do anything to extend my student loan pause? No. The extended pause will occur automatically.   Part 2. Providing targeted debt relief to low- and middle-income families To smooth the transition back to repayment and help borrowers at highest risk of delinquencies or default once payments resume, the U.S. Department of Education will provide up to $20,000 in debt relief to Pell Grant recipients with loans held by the Department of Education and up to $10,000 in debt relief to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000 or $250,000 for households. Get details about one-time student loan debt relief. In addition, borrowers who are employed by nonprofits, the military, or federal, state, Tribal, or local government may be eligible to have all of their student loans forgiven through the Public Service Loan Forgiveness (PSLF) program. For more information on eligibility and requirements, go to PSLF.gov.  FOR COMPLETE ARTICLE SEE: https://studentaid.gov/debt-relief-announcement Frequently Asked Questions How do I know if I am eligible for debt relief?  To be eligible, your annual income must have fallen below $125,000 (for individuals) or $250,000 (for married couples or heads of households).  If you received a Pell Grant in college and meet the income threshold, you will be eligible for up to $20,000 in debt relief.  If you did not receive a Pell Grant in college and meet the income threshold, you will be eligible for up to $10,000 in debt relief.   What does the “up to” in “up to $20,000” or “up to $10,000” mean?  Your relief is capped at the amount of your outstanding debt. For example: If you are eligible for $20,000 in debt relief, but have a balance of $15,000 remaining, you will only receive $15,000 in relief.   What is the Public Service Loan Forgiveness Program? The Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on your federal student loans after 120 payments working full time for federal, state, Tribal, or local government; the military; or a qualifying non-profit. Learn more about PSLF and apply. Temporary changes, which ended on Oct. 31, 2022, provided flexibility that made it easier to receive forgiveness by allowing borrowers to receive credit for past periods of repayment that would otherwise not qualify for PSLF. A borrower who missed the limited PSLF waiver deadline has one more chance to have their payment count corrected. Learn more about the opportunity for the one-time account adjustment. Visit the one-time student loan debt relief page for more information.  Part 3. Make the student loan system more manageable for current and future borrowers Income-based repayment plans have long existed within the U.S. Department of Education. However, the Biden-Harris Administration proposed a rule to create a new income-driven repayment plan that will substantially reduce future monthly payments for lower- and middle-income borrowers. The draft rule would: Require borrowers to pay no more than 5% of their discretionary income monthly on undergraduate loans. This is down from the 10% available under the most recent income-driven repayment plan. Raise the amount of income that is considered non-discretionary income and therefore is protected from repayment, guaranteeing that no borrower earning under 225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment. Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with loan balances of $12,000 or less. Cover the borrower’s unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower’s loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.  The Biden-Harris Administration is working to quickly implement improvements to student loans. Check back to this page for updates on progress. If you’d like to be the first to know, sign up for email updates from the U.S. Department of Education.