Interest on federal student loans will resume on 1 September, the US Department of Education has announced.
In a statement released to Politico, the department wrote: “Student loan interest will resume starting on September 1, 2023, and payments will be due starting in October. We will notify borrowers well before payments restart.”
The news does not come as a surprise since a key point of negotiation by Republican lawmakers in raising the debt ceiling was ending the pause on student loan payments, which have been in place since the start of the Covid-19 pandemic in March 2020 due to economic uncertainty.
The payment and interest pause was fated to end eventually since the news of litigation against Biden’s loan forgiveness program, which has advanced all the way up to the supreme court. A decision on the two cases against the program – Department of Education v Brown and Biden v Nebraska – is expected this month as the court’s term is soon ending.
The Biden administration previously announced payments will resume 60 days after the litigation is resolved or 30 June 2023, but this statement from the education department makes clear the exact date of repayment for tens of millions of borrowers.
In a scathing retort to those challenging what would be a historic loan forgiveness program, the US secretary of education, Miguel Cardona, said: “Callous efforts to block student debt relief in the courts have caused tremendous financial uncertainty for millions of borrowers who cannot set their family budgets or even plan for the holidays without a clear picture of their student debt obligations, and it’s just plain wrong.
“I want borrowers to know that the Biden-Harris administration has their backs and we’re as committed as ever to fighting to deliver essential student debt relief to tens of millions of Americans.”
President Joe Biden first announced his loan forgiveness plan in August 2020. He promised his administration would cancel up to $20,000 of federal student debt for Pell grant recipients and up to $10,000 for other borrowers. In order to qualify for student debt cancellation, borrowers could not earn more than $125,000 annually, or $250,000 for married couples filing taxes jointly.
