The moratorium was slated to expire Jan. 1, a date that 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.
WASHINGTON — President Joe Biden announced Tuesday that his administration will extend a pause on federal student loan payments while the White House fights a legal battle to save his plan to cancel portions of the debt.
Listen now and subscribe: Apple Podcasts | Google Podcasts | Spotify | Stitcher | RSS Feed | Omny Studio 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 Congressional Budget Office has said the program will cost about $400 billion over the next three decades. Autrey ruled on Oct. 20 that the states lacked standing, allowing the forgiveness plan to proceed. But the 8th Circuit temporarily halted it the next day while it considers a permanent block. That decision is still pending.
One lawsuit argued that the automatic debt cancellation would leave borrowers paying heavier taxes in states that impose a tax on canceled debt. The administration responded by allowing borrowers to opt out. Another suit alleged that Biden's plan would hurt financial institutions that earn revenue on certain kinds of federal student loans. The White House responded by carving those loans out of the plan.
Likewise, the administration has signaled it will appeal the Texas ruling. If the 5th U.S. Circuit Court of Appeals is asked to block Pittman's ruling pending appeal, the losing side could then turn to the Supreme Court. After the Texas ruling, many hit the internet, asking Google:"Is student loan forgiveness canceled?" Overall search traffic for"student loan forgiveness" quadrupled Thursday night and had increased nearly tenfold by Friday morning, according to Google Trends data.
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