Will student loan debt forgiveness ever happen? Two months after the announcement of President Joe Biden’s plan to pay off up to $20,000 in student debt for eligible borrowers, and three weeks after the the application has been launchedthe program is in legal limbo, awaiting court decisions in multiple lawsuits trying to prevent debt cancellation.

On Oct. 21, just two days before borrowers expect actual debt cancellation to begin, a federal appeals court suspended the student loan debt relief plan with an “administrative stay” barring payments indefinitely until the court decides on the case. In two other lawsuits, plaintiffs whose cases were dismissed by lower courts filed emergency motions with the U.S. Supreme Court, but Judge Amy Coney Barrett dismissed both without comment, most recently November 4.

Learn about all legal challenges to the one-time student debt relief plan and how they might affect the timing of cancellation for eligible borrowers. To learn more about student loan forgiveness, learn how debt forgiveness can change your credit score and whether you will have to pay state taxes on your discharged loans.

What are the legal arguments against the White House student loan debt relief plan?

Legal arguments against student debt forgiveness so far fall into five main categories: claims for harm to borrowers; allegations of harm to states and state agencies; claims for damages due to the devaluation of Cancellation of civil service loans; claims that the program violates the Administrative Procedure Law; and asserts that the program is unconstitutional. Many lawsuits include multiple claims for damages.

One of the biggest challenges for those who oppose student debt relief in court has been finding plaintiffs with legal status who would suffer direct harm from the student loan forgiveness program. This was first demonstrated by Garrison v. US Department of Education: Borrower Frank Garrison claimed he was wronged because his automatic student loan debt cancellation would result in a tax burden for the State of Indiana. Garrison’s legal status was badly damaged when the Department of Education announced that borrowers could opt out of debt forgiveness.

What are the biggest legal challenges to the student debt relief plan?

The biggest lawsuit opposing one-time student debt relief right now is Nebraska vs. Bidenwhere six Republican-led states (Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina) say the White House plan will hurt their tax revenues and state-based lending agencies.

The state-based lawsuit is the first legal challenge to date that has materially impacted the debt cancellation plan. Just one day after a judge in the Eastern District of Missouri dismissed the case for lack of standing, a federal circuit court suspended the program indefinitely pending its decision on the appeal.

Other lawsuits against student debt relief have yet to have much luck stopping the plan.

As mentioned above, Garrison c. US Department of Education — which claimed the plaintiff would be harmed by state taxes on automatic debt relief — was dismissed by the District Court for the Southern District of Indiana. The decision has been appealed to the Seventh Circuit Court of Appeals, but the case appears unlikely to succeed. The libertarian law firm Pacific Legal Foundation filed an emergency petition with the Supreme Court for the case, but it was denied on November 4.

Likewise, in Brown County Taxpayers Association v Biden, a Wisconsin court has dismissed a lawsuit brought by taxpayers who claimed they should pay more taxes because of the student debt relief plan. The court ruled that there is no “taxpayer standing”.

The taxpayers group also claims that the debt cancellation plan is unconstitutional. He filed emergency motions with the Seventh Circuit Court of Appeals and the United States Supreme Court to stop the plan, but both motions were denied without explanation.

Three other legal challenges to the student debt relief program are still pending in court.

The first one, Arizona vs. Biden, takes a slightly different approach than the Nebraska trial. Led by Arizona Attorney General Mark Brnovich, the lawsuit makes three allegations of injury. He says the state will lose tax revenue because student debt cancellation cannot be enforced until 2025; the program will increase inflation, which harms the state’s economy; and recruitment for government jobs will be penalized by the devaluation of the civil service loan cancellation program. Arizona has not sought a temporary injunction, and court hearings in the case have yet to begin.

A libertarian think tank also claims that it will be harmed by the one-time weakening of the student loan debt forgiveness program of the civil service loan forgiveness program, which will make it more difficult for it to recruit employees who would be eligible. The defendants in Cato Institute v. US Department of Education were served last week and hearings are expected to begin soon.

Finally, in Brown v. US Department of Educationtwo Texas borrowers – an applicant with non-federally held FFEL loans and an applicant who did not receive a Pell grant – say the debt relief plan should be canceled because it did not not required a “notice-and-comment period” as required by the Administrative Procedure Act. The case began hearings this week.

How does the White House legally defend the one-time student debt relief program?

The Department of Education argues that its one-time student debt relief plan is protected by the Higher Education Opportunities for Students Relief Act of 2003, also known as the HEROES Act. This act authorizes the Secretary of Education to change any regulations relating to any student financial assistance program for Americans who “have suffered direct economic hardship as a direct result of war or other military operation or ‘a national emergency’.

President Joe Biden and Education Secretary Miguel Cardona stand at a podium

Biden announced his unique student debt relief plan with Education Secretary Miguel Cardona on August 24.

Washington Post/Getty Images

The White House says the COVID-19 public health emergency gives the Department of Education the legal basis to forgive student loan debt under the HEROES Act.

The United States has been in a public health emergency since the Secretary of Health and Human Services declared one due to COVID-19 on January 31, 2020. This emergency declaration has been extended several times since, most recently on October 13, 2022. .

When will the student loan debt forgiveness lawsuits be resolved?

Legal experts are divided on the impact of lawsuits on the $10,000 to $20,000 student loan debt repayment plan. Regardless, no student loan debt will be forgiven under the current plan until the Eighth Circuit Court of Appeals issues its decision on the motion for a temporary injunction.

This 11-judge federal appeals court is dominated 10-1 by Republican appointees. While arguments on the injunction motion were expected from the states and the Department of Education the week of October 24, there is no indication when the court will issue its decision.

In an interview with Time NextAdvisor, student financial aid expert Mark Kantrowitz predicts that “there will be a slight delay,” but “state attorneys general are unlikely to prevail in their appeal.” .

On Thursday, October 27, Biden went even further in an interview with NewsNation, saying, “We’re going to win this case. I think in the next two weeks you’re going to see those checks coming out.” In a speech in New Mexico on November 3, Biden said that “by the end of this week, the Department of Education will have approved the applications of 16 million Americans and sent the necessary documents to the services of student loan”.