When the Biden administration announced its student loan forgiveness plan in August, it was an unprecedented move to reduce borrowers’ $1.6 trillion in debt. However, the forgiveness plan now faces several legal challenges, leaving borrowers wondering what will happen next.

In the past two months, student loan forgiveness has been the target of two high-profile lawsuits. As a result of these lawsuits, the Department of Education is no longer accepting applications for forgiveness, and the program has been suspended pending a decision by the courts. Meanwhile, the Biden administration responded by extending the student loan payment pause again.

Below, Select breaks down what you need to know about these lawsuits and what borrowers should expect to see in the coming months.

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What Happens to Student Loan Forgiveness?

First off, there are two notable lawsuits that borrowers should be aware of. A lawsuit was filed on behalf of six Republican-run states – Missouri, South Carolina, Nebraska, Arkansas and Kansas. A panel of three judges issued an injunction for forgiveness on November 14.

The injunction will remain in effect pending further orders from this court or the U.S. Supreme Court,” the 8th Circuit judges of the U.S. Court of Appeals wrote.

In other words, the program is dormant until that court or another court makes a final decision on the case.

These six states argue that by forgiving them they will lose tax revenue. The judges determined that Missouri may have a case. The state has a program known as the Missouri Higher Education Loan Authority that services and provides state student loans. If forgiveness is introduced, Missouri could lose tax revenue because it has fewer accounts to service.

The Justice Department then appealed the decision, requesting that the Supreme Court lift the injunction.

The injunction came just days after a US District Court judge in Texas struck down the program on Nov. 10. This case was brought by two plaintiffs who were not entitled to full forgiveness.

These plaintiffs allege that the Biden administration should have allowed the public to contribute to the program before it was passed. The lawsuit is supported by the Job Creators Network Foundation — an advocacy group founded by Home Depot co-founder and Republican donor Bernie Marcus.

Judge Mark Pittman ruled that the Secretary of Education exceeded his powers by using forgiveness. The Biden administration is arguing that the Secretary of Education can slash student loans from borrowers because of the Covid-19 pandemic.

“Borrowers shouldn’t panic, at least not yet,” says Mark Kantrowitz, higher education expert and author of How to apply for more college financial aid. “The effect of these two cases is to delay forgiveness until the trial plays out.”

When will my student loan payments resume?

The payment pause was first enacted by the Trump administration at the start of the Covid-19 pandemic in March 2020. Since then, the ban has been extended seven times. Borrowers could forgo student loan payments without worrying about accruing interest on their balances.

On November 19, some of those who asked for forgiveness received a confirmation email from the Department of Education.

“We have reviewed your application and determined that you are eligible for loan relief under the plan. We have forwarded this approval to your loan servicer. You do not need to take any further action,” read the email from the Department of Education.

Education Secretary Miguel Cardona tweeted that day, “Starting today, applicants and others seeking relief through the Biden-Harris administration’s debt relief plan will receive updates. Don’t worry if you don’t get an email today – there’s more to come.”

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Editorial note: Any opinion, analysis, review, or recommendation expressed in this article is solely that of Select’s editors and has not been reviewed, approved, or otherwise endorsed by any third party.

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