On Tuesday, November 22, the US Department of Education announced an extension of the pause on student loan repayment, interest and fees.

The extension will ease uncertainty for borrowers as the Biden-Harris administration asks the Supreme Court to review lower court rulings that prevent the department from collecting on the debt of tens of millions of Americans. Payments will resume 60 days after the Department receives approval to implement the program or after the litigation is resolved, giving the Supreme Court the opportunity to resolve the case within the current deadline. If the program has not been implemented and the lawsuit resolved by June 30, 2023, payments will resume 60 days after that.

“The aggressive efforts to block student debt collection in the courts have created enormous financial uncertainty for millions of borrowers who can’t set their family budgets or even plan vacations without having a clear picture of their student debt obligations, and that’s just wrong,” said the U.S. Secretary of Education. Miguel Cardona. “I want borrowers to know that the Biden-Harris administration has their back, and we are more committed than ever to the fight to provide meaningful student debt relief to tens of millions of Americans. We’re extending the payment freeze because it would be grossly unfair to require borrowers to pay back debt they wouldn’t have to pay if it weren’t for the baseless lawsuits brought by Republican officials and special interests.”

On August 24, President Biden and Secretary Cardona announced plans to provide targeted student debt relief to borrowers with loans held by the Department of Education. Borrowers with pandemic annual incomes of less than $125,000 (for individuals) or less than $250,000 (for married couples or heads of households) who received a college Pell Grant will be eligible for up to $20,000 in debt cancellation . Targeted student debt relief reverses financial damage from the pandemic, provides borrowers with a smooth transition to repayment, and helps borrowers most at risk of delinquency or default once payments resume.

To date, more than 26 million people have provided the Department with the necessary information to consider debt relief, and 16 million borrowers have been approved. But court orders block the Department from paying off student loan debt and accepting additional applications.

Last week, the Justice Department asked the Supreme Court to overturn a lower court’s injunction against the program, and suggested that if the court doesn’t do so, it could take up the student debt relief case to give borrowers clarity and relief depending on.

Borrowers can use the extra time to make sure their credit servicer contact information is up-to-date and consider enrolling in electronic debit and income-driven repayment plans to ensure a smooth transition to repayment. More information can be found at StudentAid.gov.

In addition to aid specifically aimed at mitigating the lingering economic impact of the unprecedented COVID-19 pandemic, the Biden-Harris administration has also taken other steps to support students and borrowers, make higher education more affordable and improve student loan servicing, including providing nearly 48 billions of dollars in targeted assistance to more than 1.8 million borrowers. Actions under this include:

  • In October, the Public Service Loan Forgiveness Program was overhauled, giving 360,000 borrowers $24 billion. The Department’s limited PSLF waiver helped eligible borrowers count all prior payments made by student borrowers toward PSLF, regardless of loan program.
  • Providing borrowers with Direct Loans or Department-administered Federal Family Education Loans (FFELs) with more loan forgiveness. The Department’s one-time account adjustment applies to all months spent in repayment, including pre-consolidation payments and whether they have made partial or late payments or are on a repayment plan towards Income Driven Repayment (IDR) and PSLF forgiveness.
  • Creating a fair and accessible bankruptcy discharge process to help struggling borrowers repay their student loans.
  • Providing $9.1 billion in relief to 425,000 borrowers who have a total and permanent disability.
  • Approving $14.5 billion in borrower protection claims for nearly 1.1 million borrowers, including extending full relief to approved claims and approving new types of claims.
  • Providing $1.26 billion in disbursements from closed schools to 107,000 borrowers who attended the now-defunct ITT Technical Institute.
  • Restoring student financial aid eligibility for nearly 7.5 million borrowers to help them earn a certificate or degree.

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