The Biden administration said that loan repayments will resume 60 days after the June deadline if the debt relief program has not yet been implemented.
The federal Department of Education has announced that it will extend the years-long pause on student loan repayments until at least 30 June.
According to The Ohio Capital Journal, the Education Department said that, if lawsuits targeting the Biden administration’s debt relief program have not been resolved by summer, then repayments will begin 60 days after the new deadline.
“Payments will resume 60 days after the Department is permitted to implement the program or the litigation is resolved, which will give the Supreme Court an opportunity to resolve the case during its current Term,” the Department of Education said in a statement. “If the program has not been implemented and the litigation has not been resolved by June 30, 2023 — payments will resume 60 days after that.”
The Capital Journal notes that the Biden administration had earlier indicated that student loan repayments would resume between 31 December, 2022, and 1 January, 2023.
However, the White House’s plan to forgive up to $20,000 in student loans for eligible borrowers has been impeded by a series of lawsuits.
As LegalReader.com has reported before, a Texas-based federal judge recently declared the debt cancelation program illegal.
In his ruling, the judge suggested that the Biden administration had overstepped its authority by making a monumental decision that should have been left to Congress.
While the White House has indicated that it intends to appeal the ruling, there is no guarantee the appeals process will conclude any time in the near future.
In the meantime, U.S. Education Secretary Miguel Cardona said that the administration has decided to extend the repayment pause until the litigation is resolved.
“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,” Cardona said.
President Joe Biden also opined that he believes the conservative Supreme Court will side with the administration.
“I’m confident that our student debt relief plan is legal,” Biden wrote on Twitter.
Before Biden confirmed that repayments would be rescheduled, an estimated 200 advocacy organizations asked the administration to consider an extension to the 31 December deadline.
“We, the undersigned 225 organizations, urge you to immediately extend the payment pause until your Administration is able to fully implement debt relief for all eligible borrowers and to continue to use every legal authority at your disposal to make this relief real,” the organizations wrote.
“We cannot allow these blatantly political lawsuits to throw millions of borrowers into financial catastrophe,” the letter stated. “Throwing millions of borrowers back into repayment as the state of debt relief remains uncertain is a recipe for disaster and will result in widespread confusion and set borrowers up for failure.”
The Capital Journal notes that the Congressional Budget Office found that the debt relief program would add $400 billion to the federal deficit over the next 30 years—an amount slightly less than the cost of forgiven pandemic-related PPP loans.
The Biden administration has said that about 26 million borrowers have already applied for forgiveness.