For many weeks, the nation anxiously awaited as we neared the debt ceiling limit. After weeks of tense negotiations, President Biden and House Speaker Kevin McCarthy came to an agreement on May 28th to prevent the nation from defaulting on its debt payments, which passed with begrudging bipartisan support.
Rather than raising the debt limit, the agreement suspends it until January 2025—past the 2024 presidential election. But Republicans wouldn’t support that move without also setting limits for fiscal year 2024 and 2025 discretionary spending. As a result, spending on non-defense programs, like education, will essentially be flat funded from this year to next and limited to one percent growth the following year.
The deal came with other tough losses for Democrats, including a “clawback” of $28 billion in unobligated COVID-relief funds. However, the US Department of Education has assured states and school districts that this will not affect any education relief funding, including:
- The Elementary and Secondary School Emergency Relief Fund – ESSER
- The Governor’s Emergency Education Relief Fund – GEER
- Homeless Children and Youth – HCY
- Supplemental Nutrition Assistance Program, know as (SNAP).
Finally, the agreement officially ends the student loan repayment pause and codifies the Biden Administration’s prior decision to lift the freeze on loan payments and interest, while also preventing any further extensions of the pause.
Last November, the Administration announced that student loan payments, which were initially put on hold at the onset of the COVID pandemic, would resume either 60 days after a Supreme Court ruling on its student loan forgiveness plan or 60 days after June 30, 2023 – whichever comes first. This means that interest on student loans will begin accruing on September 1, and payments will be due starting in October 2023.
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