Biden Administration Extends Moratorium On Student Loan Repayment- DOE

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Biden Administration Extends Moratorium on Student Loan Repayment- DOE

WASHINGTON (UrduPoint News / Sputnik - 23rd November, 2022) In an effort to calm the fears of student loan borrowers, the Department of education has announced some measures to mitigate court rulings that have blocked student debt relief, the Biden administration said in a press release Tuesday.

"Today, the U.S. Department of Education announced an extension of the pause on student loan repayment, interest, and collections. The extension will alleviate uncertainty for borrowers as the Biden-Harris Administration asks the Supreme Court to review the lower-court orders that are preventing the Department from providing debt relief for tens of millions of Americans," a DOE press release said.

Administration officials said student loan payments will resume two months after the DOE is allowed to implement the program or pending litigation is settled, which will give the US Supreme Court an opportunity to resolve the case during its current term. However, if the program has not been implemented and the assortment of lawsuits have not been resolved by June 30, 2023, payments will begin again 60 days after that.

According to Best Colleges, between 1995 to March 2022, the total Federal student loan debt has grown roughly 750% � from $187 billion to more than $1.6 trillion. Best Colleges adds that as with overall student loan debt, the total federal student loan debt has more than tripled in the past 15 years.

"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."

Cardona said DOE is extending the payment pause because "it would be deeply unfair to ask borrowers to pay a debt that they wouldn't have to pay if not for the baseless lawsuits brought by Republican officials and special interests."

More than 26 million people have provided DOE with the information needed to be considered for debt relief, and so far, 16 million borrowers have been approved. However, court orders are blocking the department from discharging student loan debt and accepting additional applications. President Biden and Secretary Cardona announced plans to provide targeted student debt relief to borrowers with loans held by the Department of Education in August. Borrowers with annual income during the pandemic of under $125,000 (for individuals) or under $250,000 (for married couples or heads of households) who received a Pell Grant in college would be eligible for up to $20,000 in debt cancellation.

Targeted student debt relief addresses the financial harms caused by the COVID-19 global pandemic and offers borrowers a "smooth transition" back to repayment and helps borrowers facing the highest risk of delinquencies or default once payments resume, administration officials said.