A debt ceiling default may have been averted, an economic calamity may have been averted, and President Joe Biden could soon take what amounts to a victory lap with a speech from the Oval Office Friday night. But not everyone heads into the weekend with good vibes.
One group in particular feels burned by the way the week has gone: advocates for student debt relief.
As details of the deal began circulating late Saturday night, these advocates said they were surprised to learn it included a provision effectively requiring the Biden administration to begin collecting federal student loan repayments. – which have been suspended since 2020 – at the end of the summer. .
At first, some supporters thought it was a mistake. It’s because they hadn’t been warned about it by the White House. Nor had the possibility of its inclusion been raised when a group of debt relief advocates met with senior administration officials a few weeks earlier at the White House.
But when the text of the deal was released the next day – confirming that restarting payments was part of the legislation – advocates said they felt like the sacrificial lamb of the whole deal-making process. .
“It was a total surprise. We felt like the biggest bargaining chip in the debt ceiling,” said Natalia Abrams, president of the Student Debt Crisis Center. gave us the feeling that we were being used.”
Persis Yu, deputy executive director and general counsel at the Student Borrower Protection Center, said “student borrowers got the wrong side of this deal.”
“Borrowers are now in a much more precarious situation than they were before the debt agreement,” she said.
White House spokesman Abdullah Hasan disagreed.
“No president has fought harder for student debt relief than President Biden. The administration announced in November that the suspension of student loan payments would end in August – this bipartisan budget agreement does not no changes to this plan,” he said in a statement.
“President Biden shielded the entire student debt relief package from congressional Republicans who threatened to cripple our economy unless they could gut the plan. He stopped congressional Republicans from taking away our ability to suspend student loan repayments in future emergencies,” Hasan said.
who earn less than $75,000 a year.
Biden himself pushed back against criticism that he made too many concessions in the debt ceiling negotiation process.
As for what he gave up, Biden pointed out that the reality of a divided Congress forced his hand. Neither Democrats nor Republicans, he notes, will get everything they want. “It is the responsibility to govern,” he said in a speech on Sunday.
But that’s little consolation for student debt relief groups. They say Biden has given up one of the administration’s most important tools to protect borrowers if the Supreme Court overturns the president’s plan to forgive up to $20,000 in federal loans. The court is expected to announce its decision in the coming weeks, and the president and debt relief advocates have expressed doubts that the administration will be allowed to go ahead with the proposal.
If that happened, extending the payment break would have been a logical fallback option, proponents say. Now…it’s on.
“Codifying the end of the payment pause before knowing how the Supreme Court will rule on large-scale relief is reckless and tells student debtors they are not worth fighting for,” said Braxton Brewington, Debt Collective spokesperson.
For the White House, it’s a major bet but one that has a certain logic. The president and his team repeatedly flirted with ending the payment break, to keep it in place. The debt ceiling agreement forces their hand and places some of the blame on the shoulders of Republican leaders.
Yet the process to get there was messy. Some Democrats on Capitol Hill expressed frustration at being kept in the dark during the debt ceiling negotiations. And some student loan relief advocates say it caused them to rethink their relationship with the White House ahead of Biden’s re-election.
“This is a time when people are trying to reevaluate how we can be most effective in the future,” said a lawyer who asked not to be named to protect his relationship with the administration.