Biden administration extends student loan payment pause till June amid a legal battle

A month after a US court issued a stay on Joe Biden’s ambitious student-loan forgiveness plan, the White House on Tuesday announced it will extend payment pause on federal student loans, up until June next year.

The move is aimed at allowing the court to conduct its hearing in desired time as Biden’s forgiveness plan remains blocked. 

“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,” said Miguel Cardona, education secretary in a statement. 

Biden also took to Twitter to state that his debt relief plan was legal and that Republicans were the reason it had been embroiled in a legal slugfest.

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

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Notably, if the Biden administration is still fighting the legal battle by June 30, 2023, the student loan payments will have to start two months after that. 

Ever since Covid struck the US, a pause on student loan payments has been put in place. The relief granted on Tuesday was the eighth time that the policy, first implemented in March 2020 has been extended. 

Last month, the eighth US Circuit Court of Appeals issued a stay on Biden’s ‘loan-forgiveness plan’ after considering a lawsuit filed by a coalition of six Republican-led states viz. Arkansas, Iowa, Kansas, Nebraska, Missouri and South Carolina. 

Unveiled in August, the programme attempts to provide a $10,000 relief for borrowers with salaries less than $125,000. For recipients of Pell Grants, the relief doubles to $20,000.

However, the Republicans are of the view that it will be a misuse of funds which will cost the exchequer more than $400 billion. 

(With inputs from agencies)

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