Back in November, the U.S. Department of Education announced that they would put student loan repayment, interest, and collections on hold.
The government has proposed a plan to cancel up to $20,000 in federal student loans per borrower, but the plan faces legal challenges from some states and lenders. The Supreme Court is expected to rule on the plan by June 30.
In the event they decide to uphold the plan, the Education Department is expected to implement the debt relief program and extend the payment pause until then. If the court strikes down the plan, payments will restart 60 days later.
“Callous efforts to block student debt relief in the courts have caused tremendous financial uncertainty for millions of borrowers who cannot set their family budgets or even plan for the holidays without a clear picture of their student debt obligations, and it’s just plain wrong,” said U.S. Secretary of Education Miguel Cardona.
“I want borrowers to know that the Biden-Harris Administration has their backs and we’re as committed as ever to fighting to deliver essential student debt relief to tens of millions of Americans. We’re extending the payment pause because it would be deeply unfair to ask borrowers to pay a debt that they wouldn’t have to pay, were it not for the baseless lawsuits brought by Republican officials and special interests.”
Are student loans still on hold?
The answer is yes. Back in February, the Supreme Court heard arguments for three and a half hours in the cases challenging the aforementioned student debt relief plan, as attorneys and debt relief advocates have challenged that notion. Meanwhile, U.S. Solicitor General Elizabeth Prelogar explained which are the challenges that borrowers face.
“Over the past three years, millions of Americans have struggled to pay rent, utilities, food, and many have been unable to pay their debts,” Prelogar said.
“Loan forgiveness is a paradigmatic form of debt relief, and the [education] secretary acted within the heartland of his authority and in line with the central purpose of the HEROES Act in providing that relief here.”