Biden extends student loan repayment pause amid legal battles
8 million borrowers benefit as Biden extends repayment pause
The Harris-Biden administration extended a moratorium on federal student loan repayments, pending the outcome of legal challenges against the debt cancellation plan on Monday. Approximately 8 million borrowers enrolled in the Saving on a Valuable Education (SAVE) plan will be excused from making monthly payments for at least an additional six months under the extension.
President Biden’s $475 billion loan forgiveness initiative was temporarily halted by the 8th US Circuit Court of Appeals in St. Louis in July, following rulings by federal judges in Kansas and Missouri. The legal action was instigated by seven Republican-led states. Before these preliminary injunctions, the administration had already canceled $5.5 billion in student loan debt.
The SAVE plan was introduced last August after a previous debt cancellation effort, which could have cost taxpayers up to $430 billion, was struck down by the Supreme Court. Critics, including congressional Republicans, have labelled the latest move as an attempt to garner votes in an election year.
Biden extends student loan payment pause by 6 months for 8 million SAVE plan borrowers
– Federal student loan payments for some 8 million borrowers will remain on pause for six months or longer, a spokesperson for the U.S. Department of Education said.
– The… pic.twitter.com/LUc6Lk5LQj
— AMN (@alphamarketnews) October 21, 2024
The repayment pause comes shortly after Biden canceled another $4.5 billion in student loans for public workers. In a statement last Thursday, Biden remarked, “For too long, the government failed to live up to its commitments. We vowed to fix that, and because of actions from our administration, now over 1 million public service workers have gotten the relief they are entitled to under the law.”
An Education Department spokesperson mentioned that SAVE enrollees not making payments would be placed in an interest-free general forbearance as part of the payment freeze extension. Borrowers under the SAVE plan initially had their payments paused in July.
What Other Media Are Saying
- Forbes reports that the Biden administration extends the pause on student loan payments for SAVE plan borrowers by six months amidst ongoing legal challenges.(read more)
- CBS News reports that the Biden administration’s SAVE plan is on hold due to court challenges, affecting 8 million borrowers who face financial uncertainty amid ongoing legal proceedings.(read more)
Frequently Asked Questions
Here are some common questions asked about this news
What is the Harris-Biden administration’s stance on federal student loan repayments?
They extended a moratorium on repayments pending legal challenges against the debt cancellation plan.
Who benefits from the loan repayment moratorium extension?
Approximately 8 million borrowers enrolled in the SAVE plan.
Why was President Biden’s loan forgiveness initiative halted?
It was temporarily halted by the 8th US Circuit Court of Appeals following legal challenges by seven Republican-led states.
What did President Biden say about the government’s commitment to public service workers?
He stated that the government failed to live up to its commitments and vowed to fix that.
What happens to SAVE enrollees not making payments during the extension?
They will be placed in an interest-free general forbearance.
