The federal moratorium on student loan repayments has been extended through June 30, 2023, President Joe Biden announced in a video message on Tuesday.

What You Need To Know

  • The federal moratorium on student loan repayments has been extended through June 30, 2023, President Joe Biden announced in a video message on Tuesday

  • The news comes as legal challenges to Biden's student debt forgiveness plan have placed it on hold

  • Earlier this month, the Department of Education stopped taking applications following a ruling from a federal judge in Texas blocking the plan from going into effect; The program was already temporarily barred from providing relief as a separate legal challenge from Republican-led states played out in court

  • As of early November, 16 million Americans have had their applications for student debt forgiveness approved

The news comes as legal challenges to Biden's student debt forgiveness plan have placed it on hold. Earlier this month, the Department of Education stopped taking applications following a ruling from a federal judge in Texas blocking the plan from going into effect. The program was already temporarily barred from providing relief as a separate legal challenge from Republican-led states played out in court.

"As Americans continue to recover from the pandemic, my administration is working to provide student debt relief to millions of working and middle class families across the country," President Biden said in a video message. "But Republicans special interest and elected officials sued to deny this relief, even for their own constituents."

Biden expressed confidence that his plan is legal, pledging that "we're not going to back down" on their attempts to provide student debt relief, but said that "it's not fair" to ask millions of Americans to repay student loans as the challenges play out in court.

"For that reason, the Secretary of Education is extending the pause on student loan payments while we seek relief from the courts," Biden said, adding that they will extend it "no later than June 30, 2023," which gives the Supreme Court enough time to rule on the case in its current term.

"Payments will resume 60 days after the pause ends," Biden said, adding: "I'm never going to apologize for helping working-class and middle-class families recover from the economic crisis created by the pandemic, and I'll continue working to make government work to deliver for all Americans."

As of early November, 16 million Americans have had their applications for student debt forgiveness approved. To date, more than 26 million have applied, the White House said in a fact sheet on Tuesday.

Biden announced the opening of the online application in mid-October, a a short digital form that requires your name, social security number and contact information. But following a federal judge's ruling in Texas in mid-November, a notice on the Student Aid portal's website says that the Department of Education has temporarily stopped taking applications as challenges to the policy plays out in court.

"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," Education Secretary Miguel Cardona said in a statement on Tuesday.

"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," Dr. Cardona added. "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.” 

The Biden administration has said about 40 million people could be eligible for student debt relief. Americans qualify for the program if they make less than $125,000 per year. Many will get up to $10,000 in forgiveness, while people who took a Pell grant during school are eligible for up to $20,000.

In an email to eligible borrowers over the weekend, Dr. Cardona wrote that they "believe strongly that the lawsuits are meritless" and said that they will begin discharging debt "if and when we prevail in court."

"The Biden-Harris Administration is committed to helping borrowers as they recover from the pandemic," Dr. Cardona wrote after promising to update following future developments. "Education is a great equalizer, and we will never stop fighting for you!"

To date, the Biden administration has provided "nearly $48 billion in targeted loan relief" to more than 1.8 million borrowers," the White House said Tuesday.

Spectrum News' Austin Landis contributed to this report.