rl.The U.S. Department of Education is Extending the Pause on Student Loan Repayment, Interest, and Collections (Again)
Student Loan Repayment Pause Extended Due to Legal Challenges
Student loan repayment, originally scheduled to resume on January 1, 2023, after a two-year COVID-era pause, has been delayed. The Biden-Harris administration’s one-time student loan forgiveness program, offering relief of up to $20,000 per borrower, faces legal hurdles. Lower-court orders have temporarily blocked the program’s implementation, prompting the administration to seek the Supreme Court’s intervention.
Resumption Tied to Program Resolution
The Department of Education has announced that student loan repayment will restart 60 days after either of the following occurs:
- The Supreme Court issues a final ruling on the debt relief program.
- The legal challenges are definitively resolved.
This extended pause allows the Supreme Court to consider the case during its current session. If neither condition is met by June 30, 2023, payments will resume 60 days after that date.
Education Secretary Emphasizes Fairness
Secretary of Education Miguel Cardona emphasizes the importance of fairness for borrowers. He stated that restarting payments while the debt relief program remains in limbo would be “deeply unfair.” Over 26 million borrowers applied for the program, with 16 million receiving approval. However, due to the court orders, the Department cannot discharge any debt, and the application portal is currently closed.
Opportunity to Explore Repayment Options
While borrowers have more time to prepare for repayment, this period can be productively used to explore alternative repayment options. Income-driven repayment plans, which adjust monthly payments based on your income, might be a suitable choice for some borrowers.
Seek Guidance from a Financial Advisor
For personalized advice and navigating the complexities of student loan repayment, consider contacting your IonTuition concierge advisor. They can help you understand your options and develop a repayment strategy that aligns with your financial situation.
Contact your IonTuition concierge advisor today if you have questions.