The White House extended the federal student loan payment pause and interest rate freeze following legal battles that have blocked President Biden’s plan to cancel billions of student debt.
Payments were set to resume on Jan. 1. But now they could be delayed until late summer. Unless the president extends the moratorium once more, repayment will start either:
60 days after the U.S. Department of Education is allowed to implement the president’s sweeping debt cancellation plan, or
60 days after June 30, 2023 (technically, Aug. 29, 2023).
The Biden administration extended the pause on student loan repayment after Republican legal challenges in Texas and Missouri temporarily halted the president’s plan to cancel up to $10 thousand in federal student debt for individuals who earned less than $125 thousand during the pandemic and up to $20 thousand for Pell Grant recipients.
“Republican special interests and elected officials sued to deny this relief even for their own constituents,” President Joe Biden said in a video released on Twitter. “It isn’t fair to ask tens of millions of borrowers eligible for relief to resume their student debt payments while the courts consider the lawsuit.”
Over 26 million people have applied for the forgiveness plan. The Education Department has approved 16 million applications. But court orders have blocked the department from moving forward with the promised debt forgiveness. Last month, the department stopped accepting applications, citing the injunction issued by a federal appeals court in Missouri.
The Justice Department filed an emergency application asking the justices to lift that hold. The Supreme Court agreed to hear the case and set the hearing date for Feb. 28, 2023. The Court is expected to issue a decision before the latest payment pause extension ends.
“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,” Education Secretary Miguel Cardona said.
Related: How to Apply for Student Loan Forgiveness