Biden administration extends student loan payment pause amid court battle over cancellation

President Joe Biden’s administration will extend a pause on student loan debt repayment as courts decide whether to allow a plan to cancel up to $10,000 in balances for millions of borrowers.

The Covid-19-pandemic era moratorium of payments and interest was first enacted under Donald Trump and has been extended several times.

It was set to expire on 31 December.

US Department of Education Secretary Miguel Cardona announced that he agency will extend the pause until it is “permitted to implement the debt relief program or the litigation is resolved, but no later than” 30 June, 2023. Payments will then resume 60 days later.

The extension “will alleviate uncertainty” for borrowers as the administration asks the US Supreme Court to review lower-court rulings from Republican-supported lawsuits seeking to block the president’s plan to relieve up to $10,000 in federal student loan debt balances for roughly 40 million Americans.

“Callous efforts to block student debt relief in the courts have caused tremendous financial uncertainty for millions of borrowers who cannot set their family budgets or even plan for the holidays without a clear picture of their student debt obligations, and it’s just plain wrong,” Mr Cardona said in a statement.

“We’re extending the payment pause because it would be deeply unfair to ask borrowers to pay a debt that they wouldn’t have to pay, were it not for the baseless lawsuits brought by Republican officials and special interests,” he added.

This is a developing story