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Do you need to start paying off your student loans again in January 2023?

In February the Supreme Court will hear arguments on the legality of Biden’s flagship Student Loan Forgiveness program.

Final extension for student loan moratorium

Student loan borrowers will not be forced to resume repayments in January, thanks to another extension to the moratorium first introduced at the start of the pandemic.

In March 2020 then-President Trump enacted a temporary pause on student loan repayments and that measure has been extended numerous times since then. The most recent was announced by the Biden administration on 22 November.

This final extension is a result of the legal challenges to President Biden’s Student Loan Forgiveness program, which will wipe up to $20,000 of debt from the balances of borrowers. This will entirely eliminate the debt burden for many borrowers but while the program is considered in the courts, borrowers would have been required to resume the payments.

The November extension will ensure that repayments will not continue until the Supreme Court has issued a legality on the program. Once the ruling has been given, payments will resume after 60 days. If a resolution is not found by 30 June 2023, the payments will resume after 60 days anyway.

A press release from the Department of Education explains: “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.”

When will the Supreme Court rule on Student Loan Forgiveness?

After a number of Republican-led states and some borrowers, not eligible for the full support, launched legal challenges to the program the Supreme Court is set to rule on its legality.

The cases broadly argue that Biden overstepped his executive authority by unilaterally wiping off a significant proportion of federal student loan debt. The challenges have successfully blocked the implementation so far and the matter has arrived at the Supreme Court.

The Court has set a hearing date of 28 February 2023 to hear arguments on two challenges to the program. The Biden administration has requested an expedited timeframe and a ruling will likely be announced in the following months; June, at the latest.

In an email to borrowers, advising them of the next steps, the Department of Education explained: “The Supreme Court agreed to take our case and will hear arguments this February.”

We are confident that our program is legal and have asked the Supreme Court to allow us to move forward with providing debt relief to tens of millions of eligible Americans.”


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