The Harris-Biden administration on Monday extended the federal student loan forgiveness period pending the outcome of a legal challenge to the debt cancellation plan.
Almost 8 million borrowers are enrolled in the government's Savings for Education program. [SAVE] It was first reported that the extension would allow plans to waive monthly payments for at least another six months. CNBC.
President Biden's push for $475 billion in loan forgiveness comes amid a lawsuit brought by seven Republican-led states and after earlier rulings by federal judges in Kansas and Missouri, which were filed in July by St. Louis-based Temporarily blocked by the Circuit Court of Appeals.
The Harris-Biden administration had already canceled $5.5 billion in student loan debt before the preliminary injunction.
The SAVE plan was announced last August after the Supreme Court rejected an earlier debt cancellation effort that cost taxpayers up to $430 billion.
Critics of the administration's latest student loan plan, including congressional Republicans, have described it as a brazen attempt to “buy votes” in an election year.
The repayment moratorium comes days after Biden canceled another $4.5 billion in student loans for public employees.
“For too long, our government has failed to deliver on its promises,” Biden said in a statement last Thursday. “We vowed to fix this problem, and thanks to the actions of our administration, more than 1 million public servants are now receiving relief to which they are entitled under the law.”
A Department of Education spokesperson told CNBC that non-paying SAVE enrollees will be given an interest-free general forbearance as part of the payment freeze extension.
SAVE plan borrowers initially had their payments suspended in July.
