President Joe Biden’s administration announced on Tuesday that the pause on student loan payments will be extended until “no later than June 30, 2023,” while the legality of Biden’s attempted debt transfer is determined by federal courts.
The payments have been on pause since March 2020, when former President Donald Trump issued the pause amid the coronavirus pandemic. The hold has been extended six times since it was first issued.
In August, Biden announced his plan to cancel up to $20,000 in student debt for Pell Grant recipients and up to $10,000 for individual borrowers who make under $125,000 per year or couples filing joint earnings of $250,000 or less. At the time, Biden extended the student loan payment pause until December 31, claiming that the extension would be issued “one final time.”
The payments will resume 60 days after Biden’s Department of Education is allowed to implement the program or when the litigation is resolved, whichever comes first. If the litigation is not resolved by the June 30 deadline, borrowers must begin making payments 60 days after that date.
“I’m confident that our student debt relief plan is legal. But it’s on hold because Republican officials want to block it,” Biden tweeted. “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.”
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 (@POTUS) November 22, 2022
However, Biden’s loan forgiveness program has been struck down by two different federal courts.
Following a lawsuit led by Nebraska Attorney General Doug Peterson and Missouri Attorney General Eric Schmitt, the U.S. Court of Appeals for the Eighth Circuit in October issued an administrative stay to block Biden’s program pending appeal, which was a huge blow to his attempted debt transfer.
Then, Texas federal Judge Mark Pittman declared Biden’s loan forgiveness program unlawful earlier this month, which led the administration to stop accepting new applications.
Biden’s Education Secretary Miguel Cardona called the lawsuits “meritless,” in an email sent to applicants.
Unfortunately, a number of lawsuits have been filed challenging the program, which have blocked our ability to discharge your debt at present. We believe strongly that the lawsuits are meritless, and the Department of Justice has appealed on our behalf. Your application is complete and approved, and we will discharge your approved debt if and when we prevail in court. We will update you when there are new developments.
More than 23 million people reportedly applied for the program before the applications closed.
“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,” Biden said on Tuesday. “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.”
However, some student debt cancellation activists were unimpressed by Biden’s decision to extend the payment pays, calling it the “bare minimum.”
“The least the Biden administration could do is not collect on a debt they promised they would cancel,” Debt Collective spokesperson Braxton Brewington said. “This pause extension is necessary, but also the bare minimum.”