Student loans: Will Biden extend repayment pause as relief package stalls?
On Nov. 10, the Biden administration’s student loan forgiveness program received a major blow when Texas Federal Court Judge Mark Pittman blocked it from moving forward, declaring the program illegal. initiative to give loan holders up to $20,000 in relief money.
See: Student loan repayment checks are in the mail for anyone who paid during the COVID-19 moratorium
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The decision, which also led the official StudentAid.gov website to withdraw the request, came just days before a first round of payments was supposed to go to millions of Americans – and before repayments of loans in January 2023, like GOBankingRates before. reported.
Will President Biden extend the student loan payment break?
Given the latest developments, many are wondering if President Biden will announce another break in refunds before the December 31 deadline, with media outlets (such as Forbes) saying “the odds have just increased.”
One of Biden’s goals for the student loan relief plan, first announced in August, was to permanently end the loan repayment moratoriums that have been repeatedly extended during the pandemic.
By providing nearly 45 million eligible borrowers with relief funds ($10,000 for most applicants, $20,000 for low-income Pell Grant recipients), the idea was to cancel a significant portion of unpaid debts, making monthly payments more affordable when they finally resume.
But with that funding now on hold, Biden may be forced to act and re-announce an extension of repayments, especially as pressure mounts from advocacy groups to do so.
Pressure grows to extend suspension of student loan payments
As Persis Yu of the Student Borrower Protection Center said in a recent statement, according to Forbes: “The Biden administration can no longer resume payments on January 1. It must use all of its tools to fight to ensure that borrowers receive the debt relief they need.
Natalia Abrams, president of the Student Debt Crisis Center, added, “The goal of the president’s debt cancellation plan is to help middle and working class Americans heal from the damage caused by the pandemic. We share this mission and will work diligently to ensure that every borrower has the resources they need to get back on their feet. It starts now, with an immediate extension of the federal student loan payment pause…President Biden must pause payments farther into the future to provide financial stability and peace of mind for 40 million Americans.
The White House press secretary intervenes
As news of Pittman’s decision broke late last week, White House press secretary Karine Jean-Pierre shared a statement with the media, saying President Biden would retaliate. decision and hoped to get the program back on track. “The president and this administration are committed to helping working and middle class America get back on their feet,” she said in part.
As the student debt relief program could take months to work through the courts, there is good reason to believe that Biden could impose another pause on loan repayments in the meantime, as the future of student loan relief is at stake.
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More: Newsom says California won’t tax Biden’s student loan forgiveness, saving borrowers another $1.3 billion
For now, the StudentAid.gov site has removed the loan relief application and replaced it with a message that reads, in part: “Therefore, at this time, we are not accepting applications . We seek to rescind these orders. The site also noted that the federal government would retain all previously submitted documents.
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