The Biden administration has extended the payment pause on student loan bills yet again. The relief has been in place since the start of the Covid pandemic and was set to expire at the end of the year.
Bloomberg reported the White House extended the student loan repayment freeze until June 30, 2023. This allows tens of millions of borrowers to skip out on payments, as restarting repayments early next year would’ve been messy for the administration, which has promised forgiveness.
I’m confident that our student debt relief plan is legal. But it’s on hold because Republican officials want to block it.
That’s why @SecCardona is extending the payment pause to no later than June 30, 2023, giving the Supreme Court time to hear the case in its current term. pic.twitter.com/873CurlHFZ
— President Biden (@POTUS) November 22, 2022
Any restart of repayments would’ve unleashed a student debt default wave for millions of borrowers.
“Unless the [Education] Department is allowed to provide debt relief, we anticipate there could be a historically large increase in the amount of federal student loan delinquency and defaults as a result of the COVID-19 pandemic,” James Richard Kvaal, Department of Education undersecretary of education, said in a recent court filing.
Biden’s student loan forgiveness program calls for $10,000 cancellation of federal loans per borrower who made less than $125,000 in 2020 or 2021, which is now at the mercy of the courts.
Around 16 million people have been approved for federal student loan forgiveness — and some have already been emailed – though no debt cancellation has been completed due to litigation. Biden has asked for the Supreme Court to intervene.
Currently, tens of millions of borrowers don’t have to make a payment until June of next year while the Biden administration is trying to fulfill its promise to cancel debt and avert a massive default wave that would surely hurt the president’s ratings ahead of the 2024 elections.
Tyler Durden
Tue, 11/22/2022 – 17:20
