Student loan payment pause extended again

WASHINGTON — President Joe Biden is extending the pause on federal student loan payments while the White House battles in court to save his plans to cancel portions of the debt.

The president tweeted out the news Tuesday afternoon. Secretary of Education Miguel Cardona will extend the payment pause to no later than June 30, 2023, Biden said, giving the Supreme Court time to hear the case in its current term and make a ruling.

The pandemic-era payment pause was set to expire Jan. 1, a date Biden set before his debt cancellation plan stalled in the face of legal challenges from conservative opponents.

Now it will extend until 60 days after the lawsuit is resolved. If the lawsuit has not been resolved by June 30, payments would resume 60 days after that.

Biden’s plan promises $10,000 in federal student debt forgiveness to those with incomes of less than $125,000, or households earning less than $250,000. Pell Grant recipients, who typically demonstrate more financial need, are eligible for an additional $10,000 in relief.

The Justice Department has asked an appeals court to lift a decision from U.S. District Court Judge Mark Pittman striking down Biden’s plan. Pittman, who was appointed by former President Donald Trump and is based in Fort Worth, Texas, ruled that Biden’s plan oversteps his presidential authority and usurps Congress’ powers to make laws.

It stemmed from a lawsuit brought by two borrowers who are not eligible for relief under the parameters of Biden’s plan. The program was separately halted by a St. Louis court after six Republican-led states said it would harm financial institutions. The Biden administration indicated it plans to appeal the case to the Supreme Court.

Almost 26 million people already have applied for the relief, with 16 million approved, but the Education Department stopped accepting and processing applications after the plan was ruled illegal.

Biden’s plan has drawn a flurry of legal challenges, which have seen mixed results. Opponents of debt forgiveness have asked the Supreme Court to intervene at least twice after their cases failed in lower courts. The Supreme Court rejected both requests.