Biden administration could extend payment pause on student loans again
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With the legal blows to President Joe Biden’s student loan forgiveness plan mounting, it’s possible that the administration could extend the payment pause on the monthly bills yet again, experts say.
“I’m sure they have to be considering it as an option,” said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers.
If the president’s policy remains blocked in the courts by the end of the year, higher education expert Mark Kantrowitz said, “the Biden Administration is likely to further extend the payment pause.”
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The Washington Post reported this week that officials in the White House are beginning to discuss the possibility of another extension if the lawsuits continue to thwart its loan forgiveness plan. It would be the eighth time borrowers have been given more time.
Federal student loan payments have been on pause since March 2020, when the coronavirus pandemic first hit the U.S. and crippled the economy. Resuming the bills for over 40 million Americans will be a massive task, and the Biden administration had hoped to smoothen the transition by forgiving a large share of student debt first.
However, since the president announced his plan to cancel up to $20,000 for tens of millions of borrowers in August, conservative groups and Republican states moved quickly to try to block it. The U.S. Department of Education closed its student loan forgiveness portal last week after a federal judge in Texas called Biden’s plan “unconstitutional” and struck it down.
Biden’s plan is also on hold after six GOP-led states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina — asked the courts to stay the policy while its legal challenge against it unfolds.
“Courts have issued orders blocking our student debt relief program,” according to a note on the forgiveness application page at Studentaid.gov. “As a result, at this time, we are not accepting applications. We are seeking to overturn those orders.”
Before the portal was closed, some 26 million Americans had applied for the relief. Under the president’s plan, more than 10 million borrowers were projected to get their entire student loan balance erased.
“The Biden Administration has promised forgiveness to tens of millions of borrowers who will be upset about having to make payments on loans that they expected to be forgiven,” Kantrowitz said.
The White House declined to comment.