On November 22, 2022, the Biden Administration announced that the U.S. Department of Education will extend the suspension of most federal student loan payments yet again while its student loan debt cancellation program is tied up in the courts.
Earlier this year, the administration said that $10,000 in federal student loan debt, or $20,000 if you went to college on Pell Grants, would be canceled for those earning less than $125,000 per year (or households earning less than $250,000) in 2020 or 2021. But a federal judge in Texas struck down this student loan forgiveness program. The Department of Justice has appealed the decision.
Also, in a separate lawsuit, a federal appeals court issued an injunction on behalf of six Republican-led states (Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina). Those states claim that financial institutions would be harmed if borrowers don't have to pay their outstanding loan balances.
Biden extended the pause on payments to give the Supreme Court time to decide the issue. Now, payments will resume:
This is the eighth payment pause since the beginning of the COVID-19 pandemic. Payments were previously set to resume on January 1, 2023.
Effective date: November 22, 2022