As of now, you should expect federal student loan payments to resume in 2023, especially if you expect President Biden’s one-time relief plan to erase your balance.
(Photo: GOBankingRates)
Why? The up-to-$20,000 student loan cancellation plan has been halted due to several lawsuits. On February 28, the Supreme Court will hear oral arguments in the cases, with a final decision on the program expected in the coming months.
Will the student loan forbearance period be extended?
Yes. The Biden administration extended the moratorium on federal student loan payments into 2023 in November 2022, making it as the eighth extension.
READ ALSO: New Federal Law Will Help Ease Student Loans, White House Prepares to Resume the Program
(Photo: CNBC)
Will the lawsuits be successful?
We have yet to learn. It needs to be clarified whether any lawsuits filed to prevent student loan cancellation will be successful.
However, the two most difficult lawsuits have resulted in the program’s cancellation. In one case, a judge ruled that the plan was illegal; in another, a court of appeals upheld an injunction, preventing any relief while the case was processed. The Supreme Court will hear both cases in February.
Can I still apply for debt forgiveness?
No. For the time being, the Department of Education has prohibited new applications for a student loan until the outcome of the lawsuits. According to the White House, 26 million borrowers have applied, with 16 million already processed and ready to go. It notified approved applicants via email, but the relief remains on hold.
Will I be required to return my refunded funds?
Yes, but not at the same time. If you requested a refund for payments made during the pandemic, your new payment amount would reflect a larger balance, including the refund, when payments resume.
READ ALSO: Maximum Of $2,500 Loan Deduction For Students Available Now – Here’s How to Qualify
