Administration

Biden administration extends student loan payment pause to no later than June 2023

The Biden administration on Tuesday extended the pandemic-era federal student loan payment pause and interest accrual until no later than June 2023 while the administration faces legal challenges to its debt forgiveness plan.

“I’m confident that our student debt relief plan is legal. But it’s on hold because Republican officials want to block it,” President Biden said in a statement. “That’s why @SecCardona is extending the payment pause to no later than June 30, 2023, giving the Supreme Court time to hear the case in its current term.”

The pause was set to expire on Dec. 31 after Biden extended it in August around the same time he announced the student loan forgiveness program. At the time, the White House called that extension “one final time.”

The latest extension into next year will give the Supreme Court time to decide whether it will rule on whether the program can continue.

The payment pause will end “no later than June 30, 2023,” Biden said, because payments will resume 60 days after the Education Department is permitted to implement the program or the litigation is resolved, which should come before the end of June, when the Supreme Court term typically concludes. 

Loan payments were first put on hold in March 2020 under former President Trump at the start of the COVID-19 pandemic to give individuals relief from paying their student loan bills. The freeze has since been extended six times.

Biden’s long-awaited forgiveness program has stopped accepting applications after it was blocked by several court challenges.

The Biden administration on Friday urged the Supreme Court to clear one of the legal obstacles blocking its student debt relief program, as part of the administration’s broader legal effort to have the policy reinstated.

The administration is currently fending off two separate rulings issued over the past two weeks that have effectively halted Biden’s student loan forgiveness plan, which would give federal borrowers making less than $125,000 a year up to $10,000 in debt relief.  

That move came after a unanimous three-judge panel on the 8th Circuit halted Biden’s massive debt relief plan, which had already been blocked nationwide by a separate court ruling.

In an earlier legal development, a Trump-appointed federal judge in Texas invalidated the program, saying the presidential action unlawfully encroached on Congress’s power. 

The administration has vowed to fight the challenges. 

“We’re not going to back down though on our fight to give families breathing room,” Biden said in his announcement. “That’s why the Department of Justice is asking the Supreme Court of the United States to rule on the case. But it isn’t fair to ask tens of millions of borrowers who are eligible to relief to resume their student debt payments while the courts consider the lawsuits.”

More than 23 million people applied for student loan relief before the applications closed.

Student loan advocates called the extension announced on Tuesday a necessary step, but pushed the administration to fight back against the legal challenges.

“The least the Biden administration could do is not collect on a debt they promised they would cancel,” Braxton Brewington, spokesperson for the Debt Collective, said in a statement on Tuesday. “This pause extension is necessary, but also the bare minimum. What 45 million borrowers truly need is a Biden administration that won’t allow fringe lawsuits and right-wing courts to undermine economic relief that’s already been approved.”

Natalia Abrams, president of the Student Debt Crisis Center, applauded Biden for the move. 

“Too many borrowers, parents, and students have yet to recover from the financial harm caused by the pandemic and the possibility of a winter surge in COVID-19 cases is proof that this crisis is not over. Student debt cancellation is essential to helping borrowers recover from the pandemic, but it remains stuck in the courts,” she said in a statement.

Updated at 4:05 p.m.

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