WASHINGTON D.C. | The U.S. Department of Education announced today that it is extending the student loan pause into 2023 due to legal challenges over President Joe Biden’s student loan forgiveness program.
Biden’s most recent extension of the student loan pause was set to end on December 31. However, as Biden’s one-time student loan forgiveness program has been blocked by federal courts, the administration faced pressure to further extend the pause.
Here’s what borrowers need to know
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, according to the Education Department
Student loan forgiveness legal challenges and its effects on borrowers
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. Following the court’s decision, the 8th Circuit Court of Appeals granted a nationwide preliminary injunction blocking the program. The legal challenges were filed by conservative-leaning organizations and several Republican state attorneys general.
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.