The Biden administration on Tuesday extended the pandemic-era federal student loan payment pause and the interest accrued on it until no later than June 2023, news agency the Hill reported.
The Biden administration is also facing legal challenges to its debt forgiveness plan.
US President Joe Biden said Education Secretary Miguel Cardona is extending the payment pause to no later than June 30, 2023. “I’m confident that our student debt relief plan is legal. But it’s on hold because Republican officials want to block it. 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,” Biden said.
The pause on the student loan payment would expire on December 31 but Joe Biden extended it in August around the same time he announced the student loan forgiveness program. White House at that time said it is the final time that it is making the extension.
This extension allows the Supreme Court to decide whether it will rule on whether the student loan payment pause should continue. Biden said that the pause in payment will end “no later than June 30, 2023” means that the Education Department is allowed to implement the program or the litigation is resolved, the Hill explained in its report and added that it should happen before the end of June next year, when the Supreme Court term typically ends.
Former US president Donald Trump put loan payments on hold in March 2020 in the initial phases of the Covid-19 pandemic giving individuals relief from paying their student loans. The freeze has been extended six times.
The Biden student debt-relief plan also has stopped accepting applications after several court challenges blocked its implementation, the Hill said in its report. The administration urged the Supreme Court to clear at least one of the legal obstacles that are blocking the debt relief program. The administration is trying to have the policy reinstated.
There are two separate rulings which were issued in the past two weeks which have effectively stopped the student loan relief plan. The plan allows federal borrowers making less than $125,000 a year up to $10,000 in debt relief.
It also applies to couples who file taxes jointly and have an annual income less than $250,000. The recipients of the Pell Grant will be eligible for an additional $10,000 in debt relief. The administration says it will help more than 40 million borrowers. The plan would cost the US Treasury $400 billion according to the nonpartisan Congressional Budget Office while the Education Department said it would cost $379 billion.
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