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Michigan student loan borrowers will have more time before payments resume

student loan
The Biden administration announced Tuesday it would extend the student loan pause on payments and interests. The pause may extend to Sept. 1 of next year. (Shutterstock)
  • Biden announced student loan borrowers will have more time before they must resume repayments 
  • An appeals court temporarily halted Biden’s federal student loan forgiveness plan earlier this month
  • Biden said it would be unfair to ask borrowers to resume payments while the legal challenge is pending 

Federal student loan borrowers will have more time before they are required to resume making payments on their loans, though how much time is not yet clear.

The Biden administration announced Tuesday it is extending the federal student loan pause while it faces a legal challenge to its plan to cancel up to $20,000 in federal student loan debt.

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The Department of Justice has asked the U.S. Supreme Court to reverse a decision by a lower court that temporarily halted the student loan forgiveness program. The Court of Appeals for the Eighth Circuit issued an injunction earlier this month in a case involving six states.

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In a video posted on Twitter Tuesday afternoon, Biden said he is “completely confident” his loan forgiveness plan is legal. He said it would be unfair to require borrowers to make payments on their loans while the courts consider the lawsuit. The newly announced pause may extend as far as Sept. 1. 

The pause on loan interest and collection was first implemented by the Trump administration in the early days of the pandemic and has since been extended several times. In August, President Biden announced borrowers would be expected to resume making payments in January 2023.

The Education Data Initiative estimates that there are 1.4 million student loan borrowers in Michigan, with a collective debt of roughly $51 billion.

When will borrowers have to start making payments again? 

The exact date is not yet known because it is dependent on how the legal battle over Biden’s debt forgiveness program plays out. 

The Education Department announced student loan payment will resume 60 days after the department is able to implement the student loan forgiveness program or the litigation is resolved.

If neither of those results have happened by June 30, then payments would start 60 days after that, on Sept. 1.  

What about borrowers who already submitted applications for student debt relief? 

There are 26 million people who already provided the Department of Education with information to be considered for debt relief and 16 million borrowers have been approved, according to an Education Department news release

But the federal government has not forgiven those borrowers' loans.

“Courts have issued orders blocking our student debt relief program,” the federal student aid site writes on its homepage. “As a result, at this time, we are not accepting applications. We are seeking to overturn those orders. If you've already applied, we'll hold your application.”

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