What Biden’s extended student loan pause means for borrowers

The Biden administration has extended its long-running pause on student loan repayments, arguing lawsuits filed by conservative groups and Republican elected officials to block the loan cancellation program will punish borrowers if the courts don’t resolve the issue fast enough.

Tuesday’s extension of the loan-payment pause is the latest chapter in what’s become one of the Biden White House’s hottest-button issues—and one that’s heated up considerably in the past month.

Conservative critics claim that Biden can’t simply mass-cancel student loans. His administration contends that a post-9/11 law, the HEROES Act, which gives the president the power to “waive or modify” student loan obligations during national emergencies, grants him that authority. Critics counter the program doesn’t address specific problems caused by the pandemic, so is therefore illegal.

On November 10, a federal judge in Texas struck down the student loan forgiveness program, putting Biden’s plan in jeopardy and handing a major legal victory to a conservative group, the Job Creators Network Foundation. The plan had already hit rough waters after six Republican-led states sued on September 29 to block it. In response, a federal appeals court issued an injunction on November 14 that prevents the Biden administration from moving forward. Last week, the Justice Department requested that the Supreme Court step in and rule on the issue.

Here’s what else you should know.

When does the pause end? And when will my student loan payments resume?

These two seemingly straightforward questions are both complicated by the new legal morass. To quote the White House directly: “The pause will end no later than June 30, 2023. Payments will resume 60 days after the pause ends.”

Admittedly, this hardly seems to clear things up. That’s because this time, the when isn’t up to the government. The White House is now waiting alongside borrowers to learn the relief program’s fate—plus the date when the program’s fate will get decided.

In a video posted to Twitter, President Biden blamed this on lawsuits by “Republican special interests and elected officials.” He explained that “it isn’t fair to ask tens of millions of borrowers eligible for relief to resume their student debt payments while the courts consider the lawsuit.”

What does this mean? Payments will resume 60 days after the courts resolve those cases, the Education Department explained on Tuesday. However, if the courts haven’t done this by June 30, then the Biden administration says borrowers will start repaying their loans 60 days after that.

To put this as clearly as one can: Loan repayments were set to resume on January 1. Now, they’re delayed. They’ll resume on September 1 at the very latest, but maybe sooner if the courts act faster. Regardless, once the courts resolve the issue, the White House notes that borrowers will still have a 60-day buffer before payments start again.

I’m a borrower who already applied for student loan relief. What happens next?

It just means more waiting. The Biden administration is barred from processing any applications during the appeal.

Here’s how White House press secretary Karine Jean-Pierre explained the hurdle on November 10: “For the 26 million borrowers who have already given the Department of Education the necessary information to be considered for debt relief—16 million of whom have already been approved for relief—the Department will hold onto their information so it can quickly process their relief once we prevail in court.”

I haven’t applied for relief yet. What does this mean for me?

Technically, the Biden administration says you have over a year left to apply—the deadline is December 31, 2023. But the program is closed to new applications, pending the outcome of the legal challenges.

It’s unclear if the administration intends to keep its original end-of-2023 deadline, should it win on appeal. Back when payments were first scheduled to resume in January, the White House was encouraging borrowers to apply much earlier—by mid-November—to ensure that forms could be processed before the pause ended. (This would also have ensured that monthly payments were calculated using borrowers’ new lower balances.) But since the program’s closure to new applications, the White House hasn’t offered any kind of revised recommendation. Instead, the Department of Education is asking borrowers to sign up for updates at studentaid.gov.