Here’s How Long the Latest Student Loan Payment Freeze Will Last
President Biden’s massive plan to forgive student loan debts for millions of Americans is stuck in the courts (we read more about these legal issues here ). For borrowers, the most notable impact of these legal strikes so far is that applications for Biden’s plan to write off student loans are currently not being accepted. Until this week, the pandemic pause for student loans was due to end on Dec. 31, which would leave millions of Americans unsure of how they would resume their payments.
Those millions have a lot to be thankful for this week: The Biden administration announced it will extend the pause in federal student loan payments. Here’s where student loan forgiveness stands now and what it means for you.
Where is student loan forgiveness now?
On Tuesday, the White House tweeted that “the administration is extending the pause on federal student loans to allow the Supreme Court to rule on the student debt relief program case.”
The extension is in response to federal appeals courts blocking the forgiveness plan on the basis that the Biden plan was an abuse of power. The Department of Education says on its federal student aid website that they will continue to fight for the plan, meaning student loan forgiveness will likely reach the Supreme Court.
Meanwhile, “it’s unfair to ask tens of millions of eligible borrowers to resume student debt payments while the courts are considering the lawsuit,” President Joe Biden said in a video posted on Twitter Tuesday.
What does this mean to you
This payment freeze is not permanent. The White House tweet says the pause will end when the debt relief plan can go beyond the courts. However, if the program’s legal issues are not resolved by the end of June, the payment freeze will end on June 30, 2023.
Whether in June or earlier, payments will resume 60 days after the pause ends and the administration will be allowed to implement its forgiveness plan.
It is worth noting that this is the eighth time the Department of Education has extended the pandemic pause for student loans. For now, while student loan forgiveness is stuck in the courts, it doesn’t hurt to get your repayment plan in order .