The Biden administration said Tuesday that it is extending the pause on student loan repayments in the face of legal challenges that have frozen implementation of the president’s plan to forgive up to $20,000 in debt for millions of borrowers.
The pause in federal student loan payments was first enacted at the start of the coronavirus pandemic and has been extended multiple times, with payments most recently sent to resume at the start of 2023. Under the latest extension, payments will be set to resume 60 days after litigation surrounding the debt forgiveness plan is resolved or, if the lawsuits haven’t been resolved by June 30, payments will start again 60 days after that.
Republican officials in six states have sought to block the Biden debt forgiveness plan, arguing that it exceeds presidential authority. The Department of Education said that more than 26 million people have provided the information needed to be considered for debt relief, and 16 million borrowers have been approved. But court orders are blocking the administration from discharging student loan debt and accepting additional applications while the legal challenge plays out. The Biden administration has asked the Supreme Court to reverse the federal appeals court ruling last week that halted the debt relief plan.
“It isn’t fair to ask tens of millions of borrowers who are eligible for relief to resume their student debt payments while the courts consider the lawsuit,” Biden said in a video posted to Twitter, adding that he is “completely confident” his debt forgiveness plan is legal.
The cost of another extension: Budget hawks had urged the administration not to extend the pause on repayments again. The Committee for a Responsible Federal Budget says that every month the payment pause is extended costs the federal government more than $5 billion, mostly due to lost interest collection. That means that another extension until 60 days past June 30, 2023, would cost $40 billion and would raise the total cost of the pause to $195 billion.
