About 8 million Americans with federal student loans will stay in forbearance for at least another six months, meaning they won’t have to make payments, according to the U.S. Department of Education.
First reported by CNBC, the decision to keep payments on hold will impact those enrolled in Biden’s SAVE plan, which is currently being blocked by a federal appeals court.
Those who are already enrolled in the plan will not have to make their monthly payments and will find their accounts in an interest-free general forbearance, a spokesperson for the agency shared with CBS Money Watch.
The decision will affect the 8 million borrowers in SAVE and anyone who has applied for the debt relief program for at least six more months, pending the outcome of the legal challenges to the repayment plan.
The United States Court of Appeals for the 8th Circuit temporarily blocked SAVE in June, barring the Biden administration from implementing elements of the plan that were not already being challenged by two lower court rulings. Under the SAVE plan, the Education Department had already forgiven $5.5 billion in student debt for 414,000 Americans.
Biden’s attempt to erase up to $10,000 of student debt for more than 40 million people was struck down by the Supreme Court in a 6-3 ruling in 2023.
Last week, Biden announced that an additional $4.5 billion in student debt was being canceled for about 60,000 teachers, nurses, firefighters, and other frontline public service workers.