The Biden Administration announced an eighth extension to the payment pause and interest waiver on November 22, 2022, through mid-2023. The press release cited concern about the recovery from the Coronavirus as one of the reasons for yet another extension.
The President can’t forgive student loans through executive action. But, maybe he can suspend repayment on federal student loans indefinitely instead?
The original payment pause and interest waiver was enacted by the CARES Act on March 27, 2020 and was set to expire on September 30, 2020. It was subsequently extended through December 31, 2020, January 31, 2021, September 30, 2021, January 31, 2022, May 1, 2022, August 31, 2022, December 31, 2022, and now mid-2023 (with the latest being 60 days after June 30, 2023).
The current student loan moratorium will continue through 60 days after June 30, 2023 or 60 days after either the U.S. Department of Education can resume implementation of the student loan forgiveness program or the lawsuits seeking to block the program reach a conclusion, whichever comes first.
Although the January 31, 2022 extension was identified as the final extension, the December 31, 2022 extension was also identified as a final extension. Clearly, they were not final extensions.
Could the President continue extending the payment pause again and again, never requiring borrowers to repay their federal student loans?
Maybe. But, probably not.
Editor's Note: This article was originally published in April 2022, and has been updated to reflect the latest extension dates where applicable.
How Can The President "Pause" Student Loan Payments?
The authority to provide a payment pause and interest waiver is based on the Higher Education Relief Opportunities for Students (HEROES) Act of 2003 [20 USC 1098bb].
The HEROES Act of 2003 provides the U.S. Secretary of Education with the authority to waive or modify any federal student aid provision in connection with a war or national emergency.
The Covid-19 pandemic qualifies as a national emergency. President Trump issued such a determination under the rules of the Robert T. Stafford Disaster Relief and Emergency Assistance Act [42 USC 5121-5207] on March 13, 2020. This presidential declaration remains in effect until rescinded by the President.
The justification for the payment pause and interest waiver is based on 20 USC 1098bb(a)(2)(A), which allows the U.S. Secretary of Education to take steps “as may be necessary to ensure that recipients of student financial assistance under title IV of the Act who are affected individuals are not placed in a worse position financially in relation to that financial assistance because of their status as affected individuals.”
Why Doesn't It Apply To Student Loan Forgiveness?
This waiver authority cannot be used to implement broad student loan forgiveness because the phrase “are not placed in a worse position financially” is not the same as placing an affected individual in a better position. Putting federal student loans into hibernation for the duration of a national emergency qualifies. Forgiving them does not.
This authority is intended to be temporary and is in effect only for as long as the national emergency is in effect. As soon as the President rescinds the national emergency declaration, the authority for a payment pause and interest waiver will end.
It's important to note that on November 15, 2022, the U.S. Senate passed a joint resolution, S.J. RES. 63, to end the national emergency declaration by a vote of 62 to 36, with 2 Senators not voting. The U.S. House of Representatives has not yet voted on the joint resolution. This could also potentially end the national emergency declaration.
Could A Student Loan Forbearance Last Forever?
The only way to permanently extend the payment pause and interest waiver would be for the declaration of a national emergency to be in effect forever.
This could, perhaps, happen. After all, there’s always going to be another virus variant of concern. Some public health experts believe that the coronavirus will always be with us, just like the influenza virus.
But, they will eventually run out of letters in the Greek alphabet, and if the pandemic becomes endemic, there might no longer be justification for a continuation of the national emergency.
Consider that the authority for the limited PSLF Waiver is also based on the HEROES Act of 2003. The October 31, 2022 deadline for the PSLF Waiver is a sign that the Biden administration believes that the national emergency will end soon after that date.
Mark Kantrowitz is an expert on student financial aid, scholarships, 529 plans, and student loans. He has been quoted in more than 10,000 newspaper and magazine articles about college admissions and financial aid. Mark has written for the New York Times, Wall Street Journal, Washington Post, Reuters, U.S. News & World Report, MarketWatch, Money Magazine, Forbes, Newsweek, and Time. You can find his work on Student Aid Policy here.
Mark is the author of five bestselling books about scholarships and financial aid and holds seven patents. Mark serves on the editorial board of the Journal of Student Financial Aid, the editorial advisory board of Bottom Line/Personal, and is a member of the board of trustees of the Center for Excellence in Education. He previously served as a member of the board of directors of the National Scholarship Providers Association. Mark has two Bachelor’s degrees in mathematics and philosophy from the Massachusetts Institute of Technology (MIT) and a Master’s degree in computer science from Carnegie Mellon University (CMU).
Editor: Robert Farrington