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
The Harris-Biden administration extended a moratorium Monday on federal student loan repayments pending the outcome of legal challenges against the debt cancelation plan.
Roughly 8 million borrowers enrolled in the administration’s Saving on a Valuable Education [SAVE] plan will be excused from making monthly payments for at least another six months under the extension, which was first reported by CNBC.
President Biden’s $475 billion loan forgiveness push was temporarily blocked by the St. Louis-based 8th US Circuit Court of Appeals in July — following an earlier ruling by federal judges in Kansas and Missouri — amid a lawsuit filed by seven Republican-led states.
The Harris-Biden administration had already canceled $5.5 billion in student loan debt before the preliminary injunctions.
The SAVE plan was unveiled last August after an earlier debt cancellation effort – costing taxpayers up to $430 billion – was struck down by the Supreme Court.
Critics of the administration’s latest student loan gambit, including congressional Republicans, have described the plan as a brazen attempt to “buy votes” in an election year.
The repayment pause comes days after Biden canceled another $4.5 billion in student loans for public workers.
“For too long, the government failed to live up to its commitments,” Biden said in a statement last Thursday. “We vowed to fix that, and because of actions from our administration, now over 1 million public service workers have gotten the relief they are entitled to under the law.”
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An Education Department spokesperson told CNBC that SAVE enrollees not making payments will be placed in an interest-free general forbearance as part of the payment freeze extension.
SAVE plan borrowers initially had their payments paused in July.