Biden Administration Extends Pause on Student Loans

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Washington, DC – Today, the US Department of Education announced an extension of the pause on student loan repayment, interest, and collections. The extension will alleviate uncertainty for borrowers as the Biden-Harris Administration asks the Supreme Court to review the lower-court orders preventing the Department from providing debt relief for tens of millions of Americans.

“I’m confident that our student debt relief plan is legal. But it’s on hold because Republican officials want to block it. 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,” tweeted President Biden.

Payments will resume 60 days after the Department is permitted to implement the program or the litigation is resolved. 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.

“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 US Secretary of Education Miguel Cardona. “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.”

On August 24, President Biden and Secretary Cardona announced plans to provide targeted student debt relief to borrowers with loans held by the Department of Education. Targeted student debt relief addresses the financial harms of the pandemic, provides borrowers with a smooth transition back to repayment, and helps borrowers at the highest risk of delinquencies or default once payments resume. Borrowers with annual income during the pandemic of under $125,000 (for individuals) or under $250,000 (for married couples or heads of households) who received a Pell Grant in college would be eligible for up to $20,000 in debt cancellation.

Over 26 million people have provided the Department with the necessary information to be considered for debt relief, and 16 million borrowers have been approved. But court orders are blocking the Department from discharging student loan debt and accepting additional applications.

IAT News Service
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