New student loan payment pause until 2023
While still waiting for a court decision regarding the student debt loan forgiveness plan, President Biden opted to extend the student loan payment pause once again until June 2023. See below for more.
Federal student borrowers will have extra time to figure out the outcome of the student debt forgiveness plan before payments resume.
Good news for federal student loan borrowers! While the courts try to decide the fate of President Biden’s debt forgiveness plan, student borrowers will have a little more time before payments resume. The student loan payment pause has been extended until 2023.
Via Twitter, President Joe Biden announced on a video his administration’s efforts to provide financial relief to borrowers through his forgiveness plan. Currently, the program is on hold due to, according to Biden, special interests by Republicans and elected officials.
Biden states that it’s not fair to ask millions of Americans who are eligible for forgiveness to resume their student loan payment right now. Not while the courts are still considering what to do with the lawsuit.
But what does the student loan payment pause extension mean to you? Read on to learn more.
Why did the administration extend the student loan payment pause?
Early in his presidential campaign, Biden made a promise of student debt relief through a mass forgiveness program. He also said there would be updates to existing repayment programs across the country.
However, his initial plan to forgive $10,000 for federal student loan borrowers – with an extra $10,000 for Pell Grant recipients – have been put on hold by political-related lawsuits.
When President Biden announced his relief plan, he mentioned it was time for borrowers to restart their student loan payment. That’s mostly due to the fact that the country was making good progress recovering financially from the pandemic.
But now, since the debt relief program is on hold, Biden’s administration feels it owes a good alternative to borrowers. So they’re extending the student loan payment pause until the courts can provide an answer.
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When will the student loan payments pause end?
The new student loan payment extension will last until June 30, 2023. However, if the courts make a decision on the debt forgiveness plan before that date, payments will then resume 60 days after that decision.
If by June 30, 2023 the courts remain undecided about the debt relief program, then the student loan payments will resume 60 days after the final date, according to the Department of Education.
What will happen if the courts decide against the student debt relief plan?
So far, President Biden hasn’t made any indication of a possible backup plan if the courts strike down the debt relief plan. Nevertheless, the administration makes sure to reiterate their commitment to continue to fight for borrowers.
While announcing the student loan payments pause extension, the Department of Education also pointed out other steps the administration is taking to address other problems in the student loan system.
The idea is to upgrade the Public Service Student Loan Forgiveness program. They also intend on forgiving borrowers with disabilities and who have been defrauded. Finally, the administration also wants to provide means for borrowers to discharge their student loan debt in bankruptcies.
Student loan debt forgiveness: Your ultimate guide!
If you’re still unclear about how the student loan debt forgiveness plan works, we’ve got you. Follow the link below to learn more about it, how to qualify and what you can expect from it.
Find out how you can apply and get as much as $20,000 of student debt canceled.
About the author / Aline Barbosa
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