Student Loan Forgiveness Update: Biden Admin 'Preparing to Restart Payment'

The Biden administration is "preparing to restart" repayments of federal student loan debt following the end of the coronavirus pandemic emergency, the Secretary of Education has said, though he would not publicly share details of the support borrowers would receive with the transition.

Miguel Cardona's remarks came during a Senate Appropriations Committee hearing on Thursday in which he was asked why the federal government supported loan forgiveness for former students while it was arguing it must maintain its debt commitments in a row over the debt ceiling.

The Department of Education stated in November that repayments would resume 60 days after June 30 this year after eight extensions, if litigation over the loan forgiveness program is not resolved sooner.

The Supreme Court is currently reviewing lower-court orders blocking certain elements of the program, which utilized legislation passed in the wake of 9/11 to allow Cardona to make changes to the federal student loan system during a national emergency.

While the Biden administration argues it has acted within the law, with the pandemic counting as a national emergency, House Republicans say it exploited legislation drafted to help service members and veterans.

During a hearing on the president's 2024 funding request and justification for the Department of Education's budget, Katie Britt, a freshman Republican senator for Alabama, cited remarks on Monday by White House press secretary Karine Jean-Pierre, who said in the context of the debt ceiling: "If you buy a car, you are expected to pay the monthly payments. If you buy a home, you are expected to pay the mortgage every month. That is the expectation."

Britt asked Cardona whether he agreed with the statement, to which he responded: "I agree [with] that, yes."

The GOP senator then said she believed "that same logic must apply to student loans."

"We agree and we're preparing to restart repayment because the emergency period is over, and we're preparing our borrowers to restart," Cardona replied.

He added that the HEROES Act "provides me the opportunity to create a waiver for those who are impacted significantly by the pandemic—very similar to small businesses the year before, where Congress provided a little bit of support."

Britt then referenced recent reports that claimed student loan servicers may be stopped from charging interest on federal loans until September; that the requirement to make a payment may be delayed until October 1; and that a "safety net" period would be implemented, preventing borrowers from being penalized for missing payments.

Asked if these were proposals the Department of Education was considering, Cardona demurred from commenting publicly on specifics, but said: "We recognize after three years of paused payments through two administrations, that the repayment restart is going to be a very important step, and we want to make sure it's done right.

"We're confident that the targeted debt relief will address some of the concerns of some of our borrowers who are struggling right now, but as they re-enter repayment, it's really important that we provide support for them," he added.

Newsweek approached the Department of Education via email for further comment on Friday.

The Supreme Court is expected to rule on the legality of the program sometime this summer, with repayments beginning again 60 days after its ruling if that comes before June 30.

The Department of Education said in November that 26 million people had provided it with the requisite information to be considered for the program, 16 million of whom had been approved.

However, the court orders the Supreme Court was now considering had prevented it from taking on additional applicants and forgiving student debt altogether. Under the scheme, those with an income of less than $125,000 per annum who received a Pell Grant while studying were offered a cancellation of up to $20,000 of their debt.

Meanwhile, Republican senators moved to implement a resolution in March to overturn the debt forgiveness program regardless of the opinion of the Supreme Court. Britt was one of the original cosponsors of the joint resolution.