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Student Loan Forgiveness Program
November 29, 2022Due to the legal challenges of the forgiveness program, the Department of Education extended the pause on student loan repayment through June 30, 2023

At A Glance
- In November, a handful of states filed litigation against the forgiveness program.
- On Tuesday, November 22, the White House announced that it would extend the student loan pause from December 31, 2022, to June 30, 2023.
- The Supreme Court will determine the future of the forgiveness program.
What is happening to student loan forgiveness?
In November, a handful of states filed against the forgiveness program, questioning the legality of the debt cancellation. Therefore, student loan forgiveness is on hold pending the Supreme Court's ruling on the lawsuits.
What about the student loan pause?
Due to the uncertainty of the debt cancellation program and the legal challenges, the U.S. Secretary of Education has extended the pause on student loan repayment, interest, and collections through June 30, 2023.
When will student loan payments resume?
Under the student loan pause, borrowers can hold off on student loan payments without worrying about interest accruing on their loan balances.
- If the Supreme Court allows the U.S. Department of Education to move forward with the forgiveness program, it will extend the student loan pause 60 days after the current expiration of June 30, 2023. The Department of Education will implement the forgiveness program, and student loan payments will resume.
- If the Supreme Court rules against the forgiveness program, then student loan payments will resume 60 days after the ruling.
- The 60 days in either scenario allows student loan servicers and borrowers time to plan and budget for the future.
Next Steps
At this time, the Supreme Court has not stated when they expect to rule on the current litigation. Paylocity will continue to monitor and provide updates as information develops.
Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.
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