Biden Extends Pause For Some Student Loans For Six Months

Topline
President Joe Biden’s administration is extending the pause on student loan payments for borrowers enrolled in the Saving on a Valuable Education (SAVE) plan—Biden’s latest effort at reducing student loans—by at least six months as the education department continues to defend the plan against legal challenges.
Student debt relief advocates gather outside the Supreme Court on Capitol Hill in Washington, … [+] Tuesday, Feb. 28, 2023, as the court hears arguments over President Joe Biden’s student debt relief plan. Copyright 2023 The Associated Press. All rights reserved.
Key Facts
Borrowers enrolled in the SAVE plan should expect their payments to stay in an interest-free forbearance for another six months or longer as the department works to adjust its systems amid possible legal developments, the Department of Education told Forbes. SAVE plan borrowers initially had their payments paused in July while the administration “continue(d) to vigorously defend the SAVE Plan in court” after a federal appeals court temporarily blocked it from taking effect. The plan—which aims to have borrowers’ debts to be forgiven sooner and for more borrowers to have monthly payments of $0—was announced by Biden last August after an earlier program to forgive up to $20,000 for more than 40 million borrowers was struck down by the Supreme Court in June 2023.
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Key Background
The SAVE plan would partially or fully forgive borrowers who meet certain criteria: those whose debt exceeds the amount they initially borrowed after interest; those with loans older than 20 or 25 years; those who attended career-training programs that resulted in high debt or low earnings; and those who are eligible for forgiveness programs but never applied. Republicans have sued the Biden administration over the plan, though, causing it to be tied up in court and leaving borrowers enrolled in the plan in forbearance while the legal challenges play out. A suit filed in Kansas by multiple Republican-led states and another filed in Missouri argue the relief proposed in the plan is “unlawful” and puts financial burden on the states. In late August the Supreme Court ruled Biden’s plan should stay on hold as the legal challenges continue, rejecting a request by the administration to allow most of the plan to go into effect after it was blocked by the 8th U.S. Circuit Court of Appeals.
Big Number
$5.5 billion. That’s how much the Biden administration has approved in loan forgiveness through the SAVE plan already, helping 414,000 borrowers.
Tangent
Last week Biden approved another $4.5 billion in student loan relief for about 60,000 borrowers in the latest wave of student loan forgiveness. The loans were forgiven for some borrowers who were enrolled in the Public Service Loan Forgiveness Program (PSLF), which is supposed to provide debt relief for public servants like teachers, nurses, social workers and others who have made 10 years of payments.
Further Reading
Forbes Biden Approves Another $4.5 Billion In Student Loan Forgiveness—Here’s Who Qualifies
CNN Student loan payments will be paused for 8 million borrowers after appeals court temporarily halts Biden’s repayment plan | CNN Politics