Longtime Slashdot reader theodp writes: House Speaker Kevin McCarthy (R-CA) said on Sunday that the student loan payment pause is “gone” in the debt ceiling deal announced by the California Republican and President Biden late Saturday night. “The pause is gone within 60 days of this being signed. So that is another victory because that brings in $5 billion each month to the American public,” McCarthy told Fox News on Sunday. McCarthy’s remarks came after he and Biden came to an agreement in principle late Saturday to cap spending and raise the debt ceiling.

“What the president did, he went unconstitutionally and said he was going to waive certain people part of their debt for student loan, but then he paused everybody’s student loan. So everybody who borrowed a student loan within 60 days of the signing is going to have to pay that back,” McCarthy added. “The Supreme Court is taking up that case. But if the Supreme Court came back and said that was unconstitutional, the president could still say he’s pausing, not waiving it. But now that this is in law, the Supreme Court decision will have to be upheld, that they would have to pay.”

Earlier this month, the NY Times warned students and their families to “Expect Interest Rates on Federal Student Loans to Rise” to as high as 8.05% for new PLUS loans this fall. That news came as Apple, just days after a recent $90 billion share buyback, filed a prospectus with the SEC for a new $5 billion bond program with longer-term bonds expected to have a coupon rate of approximately 5%. The imbalance between loan rates for students and Apple shareholders was actually far more pronounced before the Fed fund rate hikes started last year in response to inflation. During the pandemic, Apple — which reported around $166.3 billion in cash and investments on its balance sheet as of March 31 — held a bond sale worth $14 billion for stock buybacks and dividends to benefit from borrowing rates as low as 0.70%. Direct PLUS student loan rates at that time were down to 5.30% for new loans but as high as 8.5% for existing loans (the U.S. Dept. of Education does not offer refinancing of its up-to-30-year fixed rate loans in times of much lower interest rates). Unlike the tax-deductible interest Apple pays, annual deductions on student loan interest are capped by the IRS at $2,500 (or lower, depending on the borrower’s income).

Despite presumably benefiting from stock buybacks and dividends facilitated by Apple’s low-interest bonds — some of which carry rates as much as 90%+ lower than certain federal student loans — some of the Senators identified as Apple shareholders by NBCLX are vehemently opposed to the idea of student loan relief for high interest-paying borrowers. Senator Shelley Capito (R-WV) opposes the program as “not fair”, Senator Pat Toomey (R-PA) called it “grossly unfair”, and other Apple-shareholder Senators joined (PDF) colleagues in a Supreme Court filing calling student loan relief “unnecessary”.

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Source: Slashdot – Student Loan Payment Pause ‘Gone’ Under Debt Ceiling Deal