- The Education Department said it is "examining" extending the student-loan payment pause.
- This comes after two federal courts blocked the department from implementing debt relief.
President Joe Biden's Education Department confirmed an extension of the student-loan payment pause is on the table.
Biden's student-loan forgiveness plan has been fraught with legal battles — over the past week, two federal courts have ruled that the debt relief cannot be implemented until a final decision is made on the legality of the loan forgiveness. The administration has appealed the decisions, but the process could take months and coincide with the resumption of student-loan payments, currently set to happen after December 31.
On Tuesday, Biden's Justice Department requested a stay on one of the lawsuits that struck down the debt relief, and alongside that request, Under Secretary of Education James Kvaal filed an appendix explaining why failure to deliver debt relief to the 26 million borrowers who already applied is a problem.
"Preventing the Department from effectuating the debt relief as planned also causes significant confusion that will lead to further harm to borrowers," Kvaal wrote. "Most borrowers have been told that all they need to do is submit an application to obtain one-time student loan debt relief. Now, as a result of litigation they are left to wonder when, if at all, if debt relief will be effectuated. Despite the Department's efforts to keep borrowers informed, many borrowers may remain uncertain or confused about their repayment obligations."
He added that as a result of those challenges, the department is "examining all available options," but "those options are not without their own costs."
"For example, the Department estimates that if it temporarily extends the existing COVID-19 pandemic payment and interest accrual pause for federal student loan holders, it will cost taxpayers several billion dollars a month in unrecovered loan revenue," Kvaal wrote.
This appears to be the first time the department itself has noted that a further extension of the payment pause is under consideration. The Washington Post reported on Monday that White House officials were considering extending the pause but noted that no final decisions have been made yet.
Kvaal also referenced the "significant financial harm" borrowers stand to face if the administration is blocked from implementing student-debt relief, saying that delinquencies will surge if they have to resume payments without the relief they were promised.
Advocates and some Democratic lawmakers have been amplifying their calls to extend the payment pause in recent days. AFL-CIO director of government affairs Bill Samuel told Insider in a statement that "with the payment pause end date of Dec. 31 rapidly approaching, the AFL-CIO will continue to advocate for the full implementation of the Biden administration's student loan debt cancellation plan."
Minnesota Rep. Ilhan Omar called for an extension on Twitter on Tuesday. At this point, borrowers remain in limbo waiting to see if payments will resume in January, and whether they will have a reduction to their balances by then.