(DCWatchdog.com) – President Joe Biden has extended the pause on repaying federal student loans after his plan on student debt forgiveness got stalled by legal action initiated by several Republican-led states.
Biden imposed a moratorium on student loan repayment because of the coronavirus pandemic. He extended it several times, the last time until December 31, 2022.
The new extension until June 30, 2023, as the administration hopes a lawsuit disputing the plan would be resolved by then, The New York Post reported.
The president announced the new action he took on student loan repayment in a video message on Twitter.
“I’m confident that our student debt relief plan is legal. But it’s on hold because Republican officials want to block it,” Biden declared.
“That’s why [Education Secretary Miguel Cardona] is extending the payment pause to no later than June 30, 2023, giving the Supreme Court time to hear the case in its current term,” he added.
The president also said that “payments will resume 60 days after the pause ends.”
Under his student debt forgiveness plan announced in August, people making under $125,000 yearly will have $10,000 of their debt canceled. In addition, low-income Pell Grants recipients are eligible for a $20,000 debt cancelation.
As per the estimate of the nonpartisan Congressional Budget Office, Biden’s student debt bailout would cost the US taxpayer $400 billion.
Republican criticism says the debt forgiveness is unfair to Americans who didn’t go to college or had already paid off their student debt – plus its implementation would likely worsen the already sky-high inflation.
On November 14, a three-judge panel of the Eighth Circuit Court of Appeals in St. Louis blocked the debt cancelation plan after finding that Missouri had the standing to dispute it. It is one of the six Republican-led states suing the federal government over Biden’s plan.
The lawsuit argues that the US president does not have the legal authority to allow the federal Education Department to forgive student loans.
The Biden administration maintains the president possesses the power to cancel student debt during a national emergency such as the COVID-19 pandemic.
Last week, the administration referred the states’ lawsuit to the US Supreme Court, asking it to lift the Eighth Circuit’s injunction blocking the implementation of the debt forgiveness plan.
Biden’s policy is also being disputed in the 5th Circuit Court of Appeals in New Orleans by the conservative Job Creator Network Foundation, acting on behalf of two individual borrowers deemed ineligible for loan forgiveness.
Ruling on their lawsuit, a judge in Texas declared the president had exceeded his authority and usurped the US Congress’s legislative powers.
— New York Post (@nypost) November 22, 2022