A top progressive lawmaker is 'extremely concerned' about what the debt-ceiling deal means for student-loan borrowers, saying it constrains the time Biden has to get 'debt repayment plans up and running'

Rep. Pramila Jayapal
U.S. Rep. Pramila Jayapal (D-WA) speaks during a news conference at the U.S. Capitol on May 24, 2023 in Washington, DC. The Congressional Progressive Caucus (CPC) held a news conference to discuss the debt ceiling negotiations.Alex Wong/Getty Images
  • Biden and McCarthy's debt-ceiling deal codifies the end of the student-loan payment pause.

  • Rep. Pramila Jayapal said she's "extremely concerned" about what that means for borrowers.

  • She said it could constrain the time Biden might need to implement new repayment plans.

A top progressive lawmaker isn't thrilled with some provisions in President Joe Biden and Speaker of the House Kevin McCarthy's debt-ceiling deal — particularly when it comes to student-loan borrowers.

On Saturday night, McCarthy and Biden announced they had reached an agreement on suspending the debt ceiling until 2025 after months of stalemate. Neither party got exactly what it wanted in a deal — McCarthy was unable to achieve the $4.5 trillion in spending cuts he initially proposed, while Biden did not get a clean debt-ceiling deal, budging on certain areas like strengthened work requirements for federal programs like SNAP.

The deal also codified the end of the student-loan payment pause, which is currently set to expire 60 days after June 30 or 60 days after the Supreme Court issues a final decision on the legality of Biden's broad student-debt relief, whichever happens first.

Congressional Progressive Caucus Chair Pramila Jayapal said during a Tuesday press call that she's "extremely concerned" with that provision.

"I think our belief is that there needs to be some time to at least extend the pause until the administration can get their other debt repayment plans up and running so that people aren't being thrown into this limbo or back and forth seesaw of, you don't need to pay your student debt payments, now you need to pay them, now you don't need to pay them," Jayapal said.

Massachusetts Rep. Ayanna Pressley filed an amendment on Tuesday to preserve the student-loan payment pause in the debt-ceiling deal. "My amendment would protect student borrowers while also affirming the President's clear legal authority to implement payment pauses, broad-based debt cancellation, and other critical relief measures. Republicans continue to play games with our economy, with disregard for our most vulnerable families," she said.

As Insider previously reported, the debt-ceiling bill — called the Fiscal Responsibility Act — protects Biden's broad plan to cancel up to $20,000 in student debt for federal borrowers, and it allows the president to implement reforms to the income-driven repayment plan. It also allows the administration to implement another payment pause in the future if another emergency warrants it, but bars Biden from doing so again this year.

This has Jayapal, and many advocates, concerned about what that could mean for borrowers in just a few months. Mike Pierce, executive director of the Student Borrower Protection Center, said in a statement that the deal resumed Washington's "decades-long, bipartisan push to profit off the student debt crisis and squeeze money from student loan borrowers in order to pay the government's bills. This is a betrayal and is awful on its own terms. It also creates a major political problem for President Biden, who has tarnished his sterling legacy as a champion for working people with student debt."

Still, Education Secretary Miguel Cardona lauded the deal, writing on Twitter on Saturday that "despite Republicans' efforts to end targeted student debt relief and move up our planned end to the payment pause, we will ensure a smooth return to repayment process."

Jayapal said she will work with her caucus to determine an official stance on the legislation. Progressives are not the only group that has taken issue with the bill — a growing number of conservative lawmakers have said they will vote against the legislation because it does not include enough spending cuts, and many of them wanted to see Biden's broad student-loan forgiveness banned.

The House Rules Committee is holding a hearing on the legislation on Tuesday afternoon, and the bill is expected to head to the House floor for a full vote on Wednesday.

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