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Will the Biden administration extend the pause in the monthly student loan payments?

While it was previously announced that there would be no more moratorium extensions, developments in debt cancellation means the idea may be back on.

Court blocks Biden's student loan forgiveness program

Continuing legal problems for President Joe Biden’s student debt cancellation programme has his government looking at all available methods to try and assist students while the hold continues. One of these ideas could be to extend the payment moratorium beyond the end of this year despite this being previously ruled out.

“I’m sure they have to be considering it as an option,” said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers.

The Washington Post has reported that officials in the White House are discussing the possibility of another extension to the debt moratorium. It had previously been said that the current pause in student debt payments would be the last. Since the beginning of the covid-19 pandemic students have not been required to pay their debt.

However, there has yet to be an official comment from the White House.

What are the latest developments for the student debt cancellation?

Student loan borrowers that have already applied for forgiveness of their debt under the Biden administration’s program are in limbo after a Texas federal judge declared it illegal last week. The ruling was the second such since the Department of Education launched its online portal for borrowers to submit an application.

District Judge Mark Pittman ruled that Biden’s Student Loan Forgiveness initiative was unconstitutional and lacked the required congressional approval. The case was brought by Myra Brown owns Desert Star Enterprises Inc. Desert Star, which appears to be a sign-making business, was granted a $48,000 loan, of which $47,996 was forgiven on April 27. Brown’s argument was that she is being harmed by Biden’s debt relief order because she is not eligible for it; her student loans were originally funded by private companies.

The first stop of the debt cancellation on 21 October put a pause on processing applications already submitted, but this second court decision has prompted the Education Department to stop accepting new applications. 26 million students had already applied and over half of those have been processed.

“Courts have issued orders blocking our student debt relief program,” according to the forgiveness application page, “As a result, at this time, we are not accepting applications. We are seeking to overturn those orders.”