Nobody knows when or if student loan forgiveness will be granted.

You should expect that your federal student loan payments will resume in January 2023. This is especially important if you are counting on debt cancellation to eliminate your entire balance.

Why? The Texas federal judge has thrown out the Biden administration’s plan of eradicating up to $20,000 per borrower. Another lawsuit has placed an injunction against the plan, and many more are pending before the courts. They could also derail debt relief.

Although the Department of Education seeks to overturn court rulings, it is not certain that these roadblocks can be overcome before January.

Unless the president extends the beggar’s grace period, the clock will restart in January. Your credit score will be affected by missed payments and loans will start accruing interest again.

Can student loan forgiveness be extended?

We don’t know. The White House has yet to commit to pausing payments after the Jan. 1, 20,23 deadline. However, it is possible as forbearance was extended multiple times in 2020.

Students borrowers activists are urging the Biden administration immediately to extend forbearance.

Persis Yu, deputy executive director of Student Borrower Protection Center and managing counsel, stated that the Biden administration could not resume payments on January 1. It must make every effort to help borrowers .”

Scott Buchanan is the executive director of The Student Loan Servicing Alliance. He says that student loan servicers are progressing as though they are restarting their payments in January.

Will the lawsuits succeed?

We don’t know. It is not clear if any of these lawsuits to stop student loans being cancelled will succeed in the end.

The two most difficult lawsuits have resulted in the complete suspension of the program. A judge declared the plan illegal in one case. Although the Biden administration appealed quickly, it will take several months to get a final answer as the case continues through the courts. Another court of appeals placed an injunction, which prevents any debt relief from being granted while the case is pending.

Buchanan advises that borrowers make plans based upon the current situation. This means that student loan payments will resume in January after cancellation.

Buchanan states, “You have these large programs and big decisions that use authority that is not tested in courts.” This can lead to delays, or it could be that it doesn’t happen .”

This is what it feels like to be on the sidelines.

Dave Christensen, who borrowed money from Wisconsin during the pandemic, says that it makes him extremely frustrated. He is currently awaiting a refund and worries that he may have to repay interest. “We tend not to see the real impact of this on people span>. We drag things out so much trying to win for our agendas and our policies.

Is it possible to cancel my debts?

No. No. According to the White House, 26 million borrowers applied and 16 million have been processed.

You must submit your application by December 31, 2023, according to current guidelines.

Do I have to repay my refunded funds?

Yes, but not all at the same time. You can request a refund for payments you made during the pandemic. Your January payment amount will reflect a higher balance and include the refund.

You might want to hold off until the debt cancellation proceedings are resolved if you haven’t requested a refund. If you have not paid the loan amount required for cancellation, you will get a refund.

You have until 2023 to submit a manual request for a refund.

What happens if I can’t afford to pay?

Act now, advises Dwayne Wright, a professor in higher education administration at George Washington University.

Wright states that it will take some time. Wright suggests taking a break for lunch, perhaps an extra hour, calling your loan provider and having a conversation about January 1.

A income-driven repayment plan caps your monthly payments at a percentage of your income. This can help lower your monthly bills and extend the loan term. You can pay as little as $0.

You don’t need to recertify income if you are already enrolled in an IDR program.

An unemployment deferment is a way to get your payments shaved until you can start earning again after you have lost your job.

What happens with the other parts?

Other provisions for debt relief have not been challenged so far. However, they could be affected in the future.

  • The loan forgiveness programs were greatly simplified for public servant borrowers, teachers whose schools were shut down, and others whose schools defrauded, misled, or closed them.

  • An Income-driven Repayment Waiver will allow you to include past payments such as partial or late payments or time spent in forbearance or other deferrals, towards the 240-300 required for forgiveness.

  • ” will give borrowers who have defaulted on loans the chance to repay their loan in good standing without any penalties or catch-up payments.