President Joe Biden speaks about student loan forgiveness at Delaware State University, Friday, Oct. ... [+]
The Education Department announced that it is extending the ongoing student loan pause into 2023 in response to legal challenges over President Biden's student loan forgiveness program.
Payments and interest accrual were halted for all government-held federal student loans in March 2020 as a result of the pandemic. Congress passed legislation authorizing a six month pause, but President Trump and then President Biden issued several short-term extensions.
Biden’s most recent extension of the student loan pause was set to end on December 31. But as Biden’s one-time student loan forgiveness program has been blocked by federal courts, the administration faced pressure to extend the pause again.
Here’s what borrowers should know.
Biden Extends Student Loan Pause In Response to Court Battle Over Student Loan Forgiveness
Biden’s unprecedented student loan forgiveness program, first announced in August, would cancel $10,000 or more in student loan debt for up to 40 million borrowers. But earlier this month, a federal court in Texas struck down the program as illegal. Then, the 8th Circuit Court of Appeals granted a nationwide preliminary injunction blocking the program. The legal challenges were filed by conservative-leaning organizations and Republican state attorneys general.
The Biden administration is appealing the adverse rulings, and the legality of the initiative will end up before the U.S. Supreme Court. The Education Department announced an extension of the student loan pause while the legal process plays out.
“Callous efforts to block student debt relief in the courts have caused tremendous financial uncertainty for millions of borrowers who cannot set their family budgets or even plan for the holidays without a clear picture of their student debt obligations, and it’s just plain wrong,” said U.S. Secretary of Education Miguel Cardona in a statement. “I want borrowers to know that the Biden-Harris Administration has their backs and we’re as committed as ever to fighting to deliver essential student debt relief to tens of millions of Americans. We’re extending the payment pause because it would be deeply unfair to ask borrowers to pay a debt that they wouldn’t have to pay, were it not for the baseless lawsuits brought by Republican officials and special interests.”
“I'm confident that our student debt relief plan is legal. But it’s on hold because Republican officials want to block it,” said President Biden in a tweet. “That's why [Education Secretary Cardona] is extending the payment pause... giving the Supreme Court time to hear the case in its current term.”
Biden had linked ending the student loan pause with enacting his one-time student loan forgiveness plan, arguing that the cancellation program was intended to ensure that borrowers were not thrown back into repayment in a worse position than they were before the pandemic began.
Specifics of the Student Loan Pause Extension
According to the Education Department, “Payments will resume 60 days after the Department is permitted to implement the program or the litigation is resolved, which will give the Supreme Court an opportunity to resolve the case during its current Term. If the program has not been implemented and the litigation has not been resolved by June 30, 2023 – payments will resume 60 days after that.”
This means that if the legal challenges to Biden’s loan cancellation program are not resolved by the summer, student loan payments and interest will remain paused through the end of August 2023.
Advocacy groups for borrowers, which had mounted a pressure campaign to convince the Biden administration to extend the payment pause again, praised the decision.
“Restarting student loan payments is simply not affordable for millions of Americans. Federal student loan payments must not resume during this critical time – and the pause should continue until the President’s student debt cancellation plan is secured,” said Natalia Abrams, Student Debt Crisis Center President, in a statement on Tuesday. “We applaud the President for doing the right thing.”
“The least the Biden administration could do is not collect on a debt they promised they would cancel,” said Braxton Brewington, spokesperson for the Debt Collective, a debtor’s union advocating for student loan borrowers. “This pause extension is necessary, but also the bare minimum.”
Further Student Loan Forgiveness Reading
Did You Get A Student Loan Forgiveness Email? Education Department Sends Mass Notices To Borrowers
Court Approves $6 Billion In Student Loan Forgiveness For 200,000 Borrowers To Resolve Lawsuit
Student Loan Forgiveness Status: 6 Updates After Multiple Courts Block Relief
