On Nov. 10, the Biden administration’s student loan forgiveness program was dealt a major blow as Texas federal court judge Mark Pittman blocked it from moving forward, declaring the initiative to give loan holders up to $20,000 in relief money illegal.
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The ruling, which also resulted in the official StudentAid.gov site pulling the application, came just days before an initial round of payments were supposed to be released to millions of Americans — and ahead of loan repayments resuming in Jan. 2023, as GOBankingRates previously reported.
Will President Biden Extend Student Loan Payment Pause?
Given the latest development, it has many wondering if President Biden will announce another pause on repayments ahead of the Dec. 31 deadline, with media outlets (such as Forbes) saying “the chances just went up.”
One of Biden’s goals regarding the student loan relief plan, first announced in August, was to put a final end to loan repayment moratoriums that have been extended several times during the pandemic.
By providing nearly 45 million eligible borrowers with relief money ($10,000 for most applicants, $20,000 for low-income Pell Grant recipients), the idea was to nullify a significant portion of outstanding debts, making monthly payments more affordable when they did finally resume.
But with that funding now on pause, Biden may be forced to act and again announce an extension on repayments, especially as pressure mounts from advocacy groups to do so.
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Pressure Increases to Extend Student Loan Payment Pause
As the Student Borrower Protection Center’s Persis Yu said in a recent statement, per Forbes: “The Biden Administration cannot now resume payments on January 1. It must use all of its tools to fight to ensure that borrowers receive the debt relief they need.”
Natalia Abrams, president of the Student Debt Crisis Center, added, “The purpose of the President’s debt cancellation plan is to help middle and working-class Americans heal from the harm caused by the pandemic. We share this mission and will work diligently to ensure each borrower has the resources they need to get back on their feet. That starts right now, with an immediate extension of the federal student loan payment pause… President Biden must pause payments further into the future to provide financial stability and peace of mind to 40 million Americans.”
White House Press Secretary Weighs In
As news broke late last week regarding Pittman’s ruling, White House press secretary Karine Jean-Pierre shared a statement with the media, saying President Biden would fight back on the ruling and was hopeful to get the program back on track. “The President and this Administration are determined to help working and middle-class Americans get back on their feet,” she said, in part.
As the student debt relief program could take months to work out in the courts, there is good reason to believe Biden could impose a further pause on loan repayments in the interim as the future of the student loan relief hangs in the balance.
For now, the StudentAid.gov site has taken down the loan relief app and replaced it with a message that reads, in part: “As a result, at this time, we are not accepting applications. We are seeking to overturn those orders.” The site also noted the federal government would be holding on to all previously submitted paperwork.
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