The “last” extension of the pandemic-era suspension of interest and principal payments on federal student loans turned out not to be as final as originally thought.
The White House and the Department of Education announced Tuesday that the payment and interest moratorium had been extended for a record eighth time. Federal student loan borrowers won’t have to start making payments until 60 days after the legal issues now opposing President Joe Biden’s student loan forgiveness scheme are settled or the Department of Education is given permission to proceed with the programme.Â
In the event that the lawsuits are not settled by June 30, payments will start up again two months later. The suspension, which has been in effect since the start of the pandemic, was supposed to conclude at the end of the year. That extension, which was described as the “last” one and said that payments would resume in January 2023 in accordance with the student loan forgiveness scheme, was granted. The implementation of Biden’s student loan forgiveness programme, however, did not go as expected, which has made it difficult to resume payments.
The extension gives borrowers more time while they wait to see if Biden’s debt cancellation proposal, which would erase up to $20,000 in student loan debt per borrower, can withstand numerous current legal challenges. The administration does not legally have the right to cancel the debt without Congress’s consent, according to opponents, they claim. While the claims are being heard by federal courts, who may take the cases all the way to the Supreme Court, no forgiveness can be granted.
Chris Wyatt
Chris is an ex Financial Consultant and avid discover in ways to save and spend money. Chris has been involved in finance since 2012 and has continues to provide information in traditional financial markets and cryptocurrency.
