Biden Pauses Student Loan Payments While Debt Relief Plan Is Tied Up In Court

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President Joe Biden announced Tuesday that his administration is extending its pause on student loan payments through June 30, 2023, in light of Republicans waging a court battle over his debt forgiveness program.

“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 statement.

Biden began rolling out his highly anticipated student loan relief plan last month, offering to forgive $10,000 in student loans to individuals earning below $125,000 a year, or to people whose households earn below $250,000 annually. But after several Republican-led states filed lawsuits to block the program from going forward, a conservative federal appeals court issued a stay temporarily stopping the Biden administration from acting on the plan while the courts consider the lawsuit.

That was just days after people started applying for debt relief, creating mass confusion for borrowers.

“Callous efforts to block student debt relief in the courts have caused tremendous financial uncertainty for millions of borrowers who cannot set their family budgets or even plan for the holidays without a clear picture of their student debt obligations, and it’s just plain wrong,” Secretary of Education Miguel Cardona said in a statement Tuesday.

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,” he continued.

Biden’s administration also asked the U.S. Supreme Court last week to step in and lift the lower court’s injunction on the loan relief program.

The appeals court’s “erroneous injunction leaves millions of economically vulnerable borrowers in limbo, uncertain about the size of their debt and unable to make financial decisions with an accurate understanding of their future repayment obligations,” Solicitor General Elizabeth Prelogar wrote in the request.

The Supreme Court has yet to issue a decision.