A great deal has changed since March 2020, when executive and Congressional action paused payments on most federal student loans. The national unemployment rate spiked at 14.7 percent in April 2020, but receded dramatically and has stayed below 4 percent since December of 2021. Meanwhile, inflation climbed from an average of 1.2 percent in 2020 to 9.1 percent in June 2022—the biggest jump in 40 years.
Yet, following nine extensions, the payment pause on student loans remains in place at an approximate direct cost of $5 billion per month. The Biden Administration also has moved to end some repayments altogether, by forgiving hundreds of billions of dollars in federal student loans. Whether the forgiveness program is legal, and whether millions of Americans will have to repay their student loans back in full, is now before the U.S. Supreme Court. Justices will hear the case on February 28.
