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Student Loan Payment Pause Extended As Supreme Court Expedites Case

Dec 2, 2022

Last week, President Biden announced that the student loan payment pause would be extended until June 30th, 2023 due to the Supreme Court cases against his loan forgiveness plan. The pause was originally set to expire on December 31.

In August 2022, in keeping with his highly anticipated campaign promise, President Biden announced a student debt forgiveness plan which would impact millions of Americans. The plan promises to cancel up to $10,000 in outstanding federal student loans for non-Pell Grant recipients and up to $20,000 for Pell Grant recipients. Eligible borrowers are whose annual income is less than $125,000 (as well as married couples with an income of less than $250,000). Other institutive actions, outlined in a White House press release on the three-pronged forgiveness plan, include a cap on monthly payments at 5% of a borrower’s discretionary income and extending the reach of the Public Service Loan Forgiveness (PSLF) program.

In September, six states—Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina—sued the Biden administration over the forgiveness plan. As cited by Danielle Douglas-Gabriel of The Washington Post, the six states “accuse the president of overstepping his authority and threatening the revenue of state entities that profit from federal student loans.” On November 14th, the 8th Circuit Court of Appeals sided with the six states and blocked the loan forgiveness plan for most borrowers nationwide. In response, Biden asked the Supreme Court to reinstate the plan.

While Biden’s announcement of qualified student loan forgiveness was the president’s most sweeping measure to address student loan debt, it is not the first move he has made to eliminate student debt—within his first year in office, Biden canceled over 15 billion dollars of student debt, impacting over 675,000 Americans. Before the loan forgiveness announcement, the moratorium for student loan repayment (which was initially instituted in March 2020 as a response to the Covid-19 pandemic) had previously been extended on three separate occasions.

Biden’s payment pause was extended until June 30th or until the Supreme Court case was resolved, allowing for the case to be heard during the Supreme Court’s current term. On December 1st, the Supreme Court announced it would expedite the review of the case against Biden’s loan forgiveness plan and would start holding oral arguments in February. The Supreme Court also decided to keep in place a lower court’s halt on the program for now.

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