Fiscal Responsibility Act Addresses Student Loan Debt

President Biden has signed into law the new debt ceiling agreement that he reached with U.S. House of Representatives Speaker Kevin McCarthy (R-CA). The Fiscal Responsibility Act (FRA) suspends — as opposed to raising — the debt ceiling until 2025, after the next presidential election.

The new law codifies Biden’s previous announcement that the moratorium on student loan payments precipitated by the COVID-19 pandemic won’t be extended beyond this summer. His plan to cancel student loan debt for many borrowers — to the tune of $430 billion — isn’t part of the law. (However, the plan currently is under review by the U.S. Supreme Court.)

More updates on notable provisions addressed tomorrow morning.

Please feel free to reach out to your ELO Tax Advisor for more information or clarity on these changes.