President Biden announced that the student loan payment and interest freeze is being extended until June 30, 2023. The president said the extension will give the Supreme Court time to hear a case on the matter in its current term and finally settle on whether his forgiveness plan is legal.
President Biden used executive action to forgive $10,000 to $20,000 for borrowers who make less than $125,000 dollars a year. But there are multiple lawsuits challenging whether he has the authority to do that unilaterally.
“But Republican special interests and elected officials sued to deny this relief, even for their own constituents. But I’m completely confident my plan is legal. But right now it’s on hold because of these lawsuits,” the president said in a video announcement.
On Nov. 10, U.S. District Judge Mark Pittman blocked the federal government from starting the loan forgiveness process. He wrote it was an “unconstitutional exercise of Congress’s legislative power.” That was in response to a lawsuit filed by two college graduates who are ineligible. But there is another lawsuit by six states that is also working its way through the federal circuit. Lawyers in that suit argue the forgiveness will harm their state’s tax revenue. The judge in the case issued an injunction preventing any loans from being discharged until a final decision can be made.
Payments and interest have been frozen since the spring of 2020, but they were scheduled to start again in January. The president said it’s not fair to have borrowers resume payments while the case is working its way through the courts. Loan payments will resume 60 days after June 30 or 60 days after the administration is allowed to implement the program.