The pause on federal student loan payments, which has been in effect since March 2020, was set to expire at the end of the year.
The payment pause could now last for several more months, as the resumption of payments will depend on what happens with the litigation against Biden’s plan to cancel up to $20,000 of federal student debt for millions of eligible borrowers.
If the courts permit the administration to move forward with its plan, student loan payments will resume 60 days later, the Education Department said in a statement Tuesday. Payments would also resume in 60 days if “the litigation is resolved,” the statement said. Otherwise, if the administration has not been able to cancel debt and the litigation is still ongoing by June 30, payments will resume 60 days after that. (That would extend the forbearance until the end of August 2023.)
The federal government was forced to stop accepting applications for loan forgiveness earlier this month after a federal judge in Texas struck down the program. Last week, in a separate case, a federal appeals court issued an injunction, which was a further setback for the relief plan.
But the Biden administration is asking the Supreme Court to weigh in on the matter, hoping it will overrule the lower courts.
Biden administration extends the payment pause
In a video message Tuesday, President Joe Biden said that extending the pause on federal student loan payments will give the Supreme Court time to rule on the debt relief plan before payments resume.
Biden blamed the delays to his loan forgiveness program on conservative groups and Republican elected officials who have tied his plan up in legal battles.
“We're not going to back down though on our fight to give families breathing room. 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 eligible for relief to resume their student debt payments while the courts consider the lawsuit,” Biden said.
Over the weekend, millions of borrowers received emails from the government informing them that they are approved for student loan forgiveness and will have debt canceled if the courts allow the plan to move forward.
This is now the eighth time the payment pause has been extended. Prior to this, the most recent extension came in August.
In addition to pausing payments, the federal government had also waived interest and halted collections on federal student loan debt. Until payments resume, those measures will continue as well.