On student loan repayments, McCarthy didn’t get what he said he got

01 June 2023

Now that the US House has passed legislation that lifts the debt ceiling, we can expect to emerge an array of narratives that rationalize votes for or against it. With respect to progressive Democrats, one of those narratives will almost certainly be this: It ends the pause of student-loan repayments? No thanks.

That narrative will be rooted not in what Joe Biden has said but in what the House speaker has said. “The pause is gone within 60 days of this being signed,” Kevin McCarthy said after a White House meeting. “So that is another victory because that brings in $5 billion each month to the American public.”

There was never a principled reason to balk at raising the debt ceiling. (The Republicans raised it for Donald Trump.) So McCarthy had to invent one – they were using the borrowing cap as a means of restraining federal expenditures. The three-year moratorium on student loan repayments was costing the government billions, McCarthy said. Ending the moratorium would cut costs.

But even as McCarthy bragged about what he got, he knew he didn’t get it.

The Biden administration had paused repayments eight times since the beginning of the pandemic. The Supreme Court is likely to block a separate plan to forgive sizable chunks of student-loan debt. Pressure to resume repayments comes not only from Republicans but from Democrats, too. When asked, the US secretary of education seemed to suggest that the question wasn’t whether there will be a new pause but when repayments will restart.

“We are committed to making sure that once a decision [by the Supreme Court] is made that we are going to resume payments 60 days after. No later than June 30, we’re going to begin that process,” Miguel Cardona testified.

McCarthy said repayments will begin 60 days after the debt-ceiling legislation is signed into law by the president, but that’s not what the legislation says. It says what the Biden administration has been saying – that repayments will restart no later than June 30, meaning they will resume sometime in early fall.

The House speaker is claiming credit for having ended, through debt-ceiling negotiations, something the Biden administration was already feeling pressured to end, separate and apart from debt-ceiling negotiations. In other words, McCarthy is saying he won. Joe Biden is saying yeah, Kev. Sure, you did.

To be sure, the president reportedly surrendered the administration’s ability to continue pausing student loans as part of his deal with the House Republicans. This has some claiming that he gave up too much. But the likelihood of the Biden administration continuing to pause repayments was extremely low.

Biden would probably prefer not to bring attention to the complete facts of the matter, because, one way or another, they make him look bad. (McCarthy might have done him a favor. Biden can say, somewhat truthfully, that it wasn’t his choice to end the moratorium. He can say the Republicans forced him to.)

The same can’t be said of the House speaker. Though McCarthy didn’t really get what he bragged about getting, his bragging about having got it sailed across the political spectrum to the ears of Democratic progressives in the House who wanted Biden to continue pausing repayments, and who in turn decided that whatever’s good for the House speaker must be bad for them.

So ending the current pause on student loan repayments has emerged as one of the reasonsreasons why some Democratic progressives decided to vote against lifting the debt ceiling. Other reasonsreasons, according toCommon Dreams, include provisions in the bill “that would slash food assistance, require approval of a gas pipeline and end the federal moratorium on student loan payments — all while maintaining hundreds of billions of dollars in Pentagon spending and low taxes for corporations and the wealthiest Americans.”

What’s the moral to be drawn here? I can’t know that I know. What I do know, however, is that McCarthy didn’t get what he said he got. What I do know is that McCarthy seeming to get it became nearly the same as getting it. What I do know is that standing on the line between seeming to get and getting was enough for McCarthy’s adversaries to vote against what he didn’t really get.

From Your Site Articles