Student loan payments: Biden administration extends repayment pause

The Department of Education on Tuesday extended a pause on student loan repayments through June as officials ask the Supreme Court to determine whether the department has the authority to carry out President Joe Biden’s announced student debt relief program.

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Officials said payments will resume 60 days after litigation over the program 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,” Department of Education officials said in a news release.

Last week, the Justice Department asked the Supreme Court to decide whether officials have the authority to cancel student debt for millions of Americans. Under Biden’s student debt relief program, Pell Grant recipients would get as much as $20,000 in student loan debt relief while federal student borrowers would get as much as $10,000 in debt relief. Americans who make less than $125,000 would be eligible for the relief.

States have sued to stop the program, arguing that it exceeds the authority granted to the Secretary of Education. A federal judge in Texas has also found the program to be unlawful and blocked its implementation.

Nebraska Attorney General Doug Peterson — one of several attorneys general challenging the debt relief program — last week said the program “threatens serious harm to the economy that cannot be undone.”

“It is important to stop the Biden administration from such unlawful abuse of power,” he added.

In a video posted Tuesday on social media, Biden said he was “completely confident my plan is legal.”

“Right now, it’s on hold because of these lawsuits,” he said. “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.”

He said the decision was made to extend the student loan repayment pause because “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. "

About 26 million Americans have applied for the debt relief program so far, including 16 million people whose applications have been approved, officials said.

In the third quarter of 2022, the Federal Reserve estimated that Americans owed more than $1.7 trillion in student loans.