WASHINGTON — President Biden on Tuesday extended the moratorium on federal student loan repayments through June 30 as courts review his plan to forgive up to $20,000 in student debt to certain borrowers.
Biden announced the delay in a video message posted to Twitter, saying he was “completely confident my plan [to forgive debt] is legal” but that “it isn’t fair” to resume loan payments as challenges appear destined for the Supreme Court.
“I’m confident that our student debt relief plan is legal. But it’s on hold because Republican officials want to block it. That’s why [Education Secretary Miguel Cardona] is extending the payment pause to no later than June 30, 2023, giving the Supreme Court time to hear the case in its current term,” Biden said.
The president added in his video message that “payments will resume 60 days after the pause ends.”
The nonpartisan Congressional Budget Office estimated that the cost of Biden’s student debt bailout would run to $400 billion. Republicans say the plan could worsen inflation and isn’t fair to people who either didn’t attend college or have already repaid their debts.
Biden announced the loan forgiveness plan in August, saying he was making good on a campaign pledge.
The president’s stalled plan calls for $10,000 to be deducted from the debt of people with federally held student loans making under $125,000 annually. Former students who received low-income Pell Grants are eligible for up to $20,000 in loan forgiveness under the plan.