After a federal appeals court halted a plan to forgive student loan debt for millions of Americans, the Biden administration on Tuesday extended a payment pause until the end of June 2023. (Loan payments, interest, and collections were set to resume in January 2023.)

It’s unclear whether the debt forgiveness plan will happen. The Department of Justice has asked the U.S. Supreme Court to review the case.

“I’m confident that our student debt relief plan is legal. But it’s on hold because Republican officials want to block it,” Biden tweeted. Extending the payment pause to no later than June 30, 2023, will give the Supreme Court time to hear the case in its current term, he said.

In a news release, the Department of Education explained: “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. 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.”

To date, more than 26 million people have provided the department with the necessary information to be considered for debt relief, and 16 million borrowers have been approved. But the court order is blocking the Department from discharging student loan debt and accepting additional applications.

If the program is allowed to continue, the Department of Education will provide up to $20,000 in debt cancellation with loans held by the federal government to Pell Grant recipients, and up to $10,000 in debt cancellation to non-Pell Grant recipients. To be eligible for this relief, your 2020 or 2021 annual income must have been less than $125,000 (individual, or married but filing separately), or less than $250,000 (married couples filing jointly, or head of household).

In the meantime, borrowers are encouraged to use the additional time to ensure their contact information is up to date with their loan servicers, and consider enrolling in electronic debit and income-driven repayment plans to support a smooth transition to repayment, should it be allowed. You can do this at StudentAid.gov.

If you know you will not be able to make payments once the latest pause expires, look at the various repayment plans available from the federal government. You may also qualify for the Public Service Loan Forgiveness Program.

 




Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He is also the consumer reporter for NW Newsradio in Seattle. You can also find him on Facebook, Twitter, and at ConsumerMan.com.