Student Loan Repayment Pause Extended Through June 2023

grad cap on pile of moneyThe Department of Education extended the payment, interest and collections pause while legal challenges play out; a request for the U.S. Supreme Court to step in is pending.

11/22/2022 3:30 P.M.

2 minute read

The U.S. Department of Education has extended the pause on student loan repayment, interest, and collections through June 30, 2023, while the Biden administration has asked the U.S. Supreme Court to review legal challenges to its student loan forgiveness plan.

“Payments will resume 60 days after the [d]epartment 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 [t]erm,” according to a news release from the DOE. “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 Biden administration, with the help of the U.S. Department of Justice (DOJ), is turning to the U.S. Supreme Court for help with legal challenges to its student loan forgiveness plan—in particular, one arguing that the plan goes beyond what Congress allows, ACA International previously reported.

According to a report from The Hill, the request is part of an expansive legal strategy to respond to lawsuits challenging the plan.

The DOJ is seeking to remove an injunction preventing the plan from moving forward in the U.S. Court of Appeals for the 8th Circuit as well as a pause from the U.S. Court of Appeals for the 5th Circuit in a Texas case that found the plan is illegal.

Several other cases in courts across the U.S. are on the books challenging the student loan forgiveness plan, but those in the appeals process in the 5th and 8th Circuits carry the most weight at this time.

The student loan payments were set to resume Dec. 31 until the legal challenges to the student loan forgiveness plans ramped up in the last couple of months.

“Last week, the Department of Justice requested that the Supreme Court lift the lower court’s injunction against the program and suggested that if the [c]ourt does not do so, it could take up the student debt relief case, to provide borrowers the clarity and relief they are depending on,” according to the DOE’s news release.

The DOE reports borrowers can use the continued payment pause to make sure their contact information is correct with student loan servicers and consider signing up for electronic debit and income-driven repayment plans.

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