Student Loan Pause Extension 2023: What You Need to Know

Updated on September 7, 2023

The student loan payment pause is extended until 2023 to allow time for the courts to rule on President Joe Biden’s targeted debt cancellation.

President Joe Biden’s broader plan to cancel student loan debt for millions of Americans is in limbo after two federal courts blocked it. Rather than restart monthly payments in January, the Biden administration announced last week it would hold off a few more months to allow time to resolve legal challenges. If the cases are still pending by June 30, the student loan forbearance will end 60 days later.

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 @SecCardona 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. pic.twitter.com/873CurlHFZ
— President Biden (@POTUS) November 22, 2022

Payments and interest have been on hold for most federal student loan borrowers since the pandemic started in March 2020. They were set to resume a few months later, but former President Trump and President Biden extended the moratorium multiple times.

Here’s what you need to know about the latest extension to the federal student loan payments forbearance.

Payments will resume in 2023

Federal student loan payments will start back up 60 days after the department is allowed to implement the program or the litigation is resolved. If that hasn’t happened by June 30, payments will resume 60 days later, on Sep. 1.

Related: Are All Student Loans on Hold?

The latest extension is a direct result of the White House’s ongoing legal battle to overturn the president’s targeted student loan forgiveness plan.

The Biden administration took the fight to the Supreme Court, requesting that it reinstate the debt forgiveness program, which will cancel $10 thousand from the balances of over 40 million borrowers. Pell Grant recipients are eligible for up to $20 thousand in relief. If you’re unsure if you have ever received this grant, go to the Federal Student Aid website, StudentAid.gov.

“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 [U.S. Department of 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.” President Joe Biden.”

The uncertainty surrounding Biden’s debt relief program has left borrowers in the dark. Before the courts shut the door, more than half of those eligible for student loan relief had already applied for forgiveness. Despite the halt, the Education Department and its student loan servicers reviewed over 20 million applications and sent notices to borrowers informing them that their applications had been approved — pending the outcome of the cases.

The extension means that borrowers with Ed-held student loans will continue to have their payments suspended and their interest rates set to 0%. They’ll also continue to earn credit toward Public Service Loan Forgiveness and income-driven repayment plan forgiveness.

Related: Does the Student Loan Pause

Bottom Line

The Biden administration extended the pause on student loan repayment until maybe the middle of 2023. Most federal student loan borrowers can avoid making payments or paying interest on their balances for a few more months. They’ll also continue to earn credit towards PSLF and IDR Forgiveness until payments resume.

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