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Biden admin freezes student loan payments for at least another 7 months

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The Biden administration has officially extended the moratorium on student loan payments from the pandemic until June 2023. The pause was first introduced by former President Donald Trump during the early days of the COVID-19 pandemic and has since been extended several times. In August 2022, when Biden announced plans to end his student loans, he also announced that he would extend that payment moratorium until December 31, 2022 — for the last time. But now, after lawsuits clouded borrowers’ plans to cancel federal loans, the Biden administration has announced it will extend the payment moratorium again.

Following a letter signed by more than 200 national, state and local organizations warning of disastrous consequences if the payment moratorium is not extended before it expires, the new date will protect millions of borrowers waiting in the limbo of the student loan forgiveness program. Here’s what you need to know.

How long has the pandemic student loan payment moratorium been extended?

On November 22, 2022, the Biden administration Confirmed that the moratorium on student loan payments has been extended. Rather than ending at the end of this year, when the student loan forgiveness program was set to kick off in the new year, A definitive postponement has been granted, with payment suspended until at least June 30, 2023.

The loan payment pause will also last at least 60 days until the process is resolved, ostensibly to give borrowers a chance to apply for student loan forgiveness, get forgiveness of those loans, and pay back their loans before payments can resume . To give time to determine the new balance. If the lawsuit is not resolved and the program is not implemented by June 30, payments will begin 60 days after that, at least for now.

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What’s going on with student loan lawsuits?

The new date comes as the student loan forgiveness program — which would provide between $10,000 and $20,000 in debt relief per student borrower who does not exceed a certain income threshold — is shut down due to legal issues in several states. In early November, a Texas judge struck down the pardon plan; Then it was rejected again in the Eighth Circuit Court of Appeals in St. Louis.

The lawsuits aim to completely overturn the Biden administration’s student loan forgiveness plan, with opponents claiming the president is eroding his authority with the loan forgiveness program.

White House Press Secretary Karine Jean-Pierre previously said, “The administration will continue to fight these baseless lawsuits by Republican officials and special interests and will never stop fighting to support working and middle-class Americans. “

While Biden is “absolutely convinced” that his loan forgiveness plan is legal, he acknowledges that the time it takes for the court to hear the case will financially harm thousands of Americans.

“It is not fair to ask the tens of millions of borrowers who qualify for exemption to repay their student loans,” Biden said in a statement. video posted on twitter expansion announcement.

Biden said the moratorium on student loan repayments would allow enough time for a Supreme Court case to continue in the current term. CNN,

The student loan deferral has been extended eight times since its inception in March 2020.

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