​Student Loan Payment Pause Extended As Courts Settle Debt Relief Plan

ACROSS AMERICA — Student loan borrowers will get another reprieve after the Biden administration said Tuesday it would extend its pandemic-era pause on federal student loan payments while courts decide if the debt relief plan can move forward.

The moratorium was set to expire Jan. 1, a date President Joe Biden set before a lawsuit challenged the program that could potentially deliver thousands of dollars of debt relief for millions of borrowers.

“We’re extending the payment pause because it would be deeply unfair to ask borrowers to pay a debt that they wouldn’t have to pay, were it not for the baseless lawsuits brought by Republican officials and special interests,” Education Secretary Miguel Cardona said in a statement.

The pause will continue for another six months, with the first payments due two months after June 30, unless a U.S. Supreme Court decision on the debt relief program comes first.

A three-judge panel of the 8th U.S. Court of Appeals voted unanimously on Nov. 14 to issue an injunction preventing the Biden administration from discharging the debt. In a separate ruling last week, a federal judge struck down the program as unlawful.

About 16 million federal student loan borrowers received letters over the weekend letting them know their applications for debt relief had been approved, but also telling them not to expect money soon.

As many as 40 million borrowers are eligible for the program, which would cancel up to $20,000 in student debt for individuals earning less than $125,000 per year, or less than $250,000 for married couples. The program is expected to cost about $400 billion, according to estimates from the nonpartisan Congressional Budget Office.

The Justice Department last week asked the Supreme Court to examine the issue and reinstate Biden’s debt cancellation plan. The Biden administration has expressed confidence its program will survive, but paused loan forgiveness applications until the court challenges can be resolved.

A note on the government’s student aid website tells borrowers that updates will be posted as they’re available, and that already submitted applications will be held.

Mike Pierce, the executive director of the advocacy group Student Borrower Protection Center, told CBS News the letters help “folks understand a bit better why they haven’t had their debts forgiven yet.”

But, he said, “that doesn’t completely do away with the real economic anxiety that people with student loans feel at this moment.”