The Department of Education (ED) on November 22 announced that the freeze on federal student loan repayment will remain in effect while it battles multiple legal challenges surrounding President Biden’s plan for student debt relief.

This is the eighth time the moratorium has been extended since it was first enacted in March 2020, with the most recent would-be expiration scheduled for December 31, 2022. 

But unlike previous extensions, the announcement did not include a specific date on which the freeze will end. Instead, ED now plans to resume monthly federal student loan payments 60 days after the lawsuits blocking widespread loan forgiveness are resolved or 60 days after June 30 — whichever comes first. 

So, you may be wondering . . . what now?


The Supreme Court is officially involved

The Supreme Court on December 1 said that it will review the legality of Biden’s student loan forgiveness program in February — and expedite its ruling afterwards. The announcement comes after the Justice Department asked the Court to reverse one of the injunctions that is blocking the ED’s ability to grant discharges.


Borrowers are in limbo

To be sure, the latest extension will give borrowers added months of financial relief and staves off the logistical challenges posed by resuming monthly payments before forgiveness can be administered to eligible loan accounts.

But the announcement also leaves borrowers up in the air — in more ways than one.

While the Supreme Court has said it will move quickly to make a decision, the specific timeline is still vague — and for many borrowers, not knowing exactly when their next monthly payment will be due is a significant disruption to their ability to manage other financial decisions in the meantime. 

Most frustrating of all is that with the fate of widespread debt relief still unknown, borrowers don’t know how much that bill will be — or if they’ll have a bill at all. If ED is able to move forward and grant forgiveness before the moratorium ends, an estimated 20 million borrowers’ monthly minimum payment amount would drop, and 20 million more would have their debt balance wiped away in full. 


The Department of Education is ready to grant forgiveness ASAP

ED is blocked from sending relief to borrowers’ accounts — but they’re still moving Biden’s plan forward in other ways.

Just days after the rulings that halted forgiveness, ED sent emails to 16 million applicants notifying them that they’d been approved and that it would adjust loan balances “if and when we prevail in court”, underscoring officials’ confidence that the program will eventually be able to proceed.

Until that day comes, ED is continuing its work on other strategies to support borrowers. Permanent improvements to Public Service Loan Forgiveness and Income-Driven Repayment are slated to be implemented this July, including a one-time account adjustment that will help eligible borrowers get closer to forgiveness.