Biden administration extends pause on student-loan payments as debt-forgiveness plan remains mired in litigation

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President Joe Biden said on Tuesday that the moratorium on federal student loan payments, collections and interest would continue beyond December 31 of this year and possibly for several more months.

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The Biden administration is extending the pause, which began in March 2020 at the start of the pandemic, to no later than 60 days from June 30, 2023. The freeze’s continuation of the Biden administration’s debt-relief plan remains in litigation. In his announcement, Biden said he was confident that his initiative, which would provide $10,000 for borrowers with an income of $125,000 or less and $20,000 for those who meet income criteria and use Pell grants in college, will be repealed. Will do, it’s legal.

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Nevertheless, he said he wanted to extend the stay to give “time to the Supreme Court to hear the matter in its current term”. Borrowers will be asked to resume payments after 60 days of implementing the forgiveness initiative by the department or 60 days after June 30, 2023, whichever is earlier. This means that this moratorium may continue till the end of August 2023.

Almost immediately after the White House announced the debt-relief plan in August, critics began looking for plaintiffs to challenge it. Earlier this month, a federal judge in North Texas struck down a loan-forgiveness initiative as unconstitutional. A panel of appeals-court judges said they would temporarily block the plan while they hear a case asking it be blocked. The Biden administration has asked the Supreme Court to hear the case and reinstate the debt-relief initiative.

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Biden announced the extension of the pause, saying, “We are not going to back down from our fight to give families breathing space.”

Earlier this month, the Biden administration said it had approved 16 million applications for debt relief under the program.

Credit: www.marketwatch.com /

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