Student loan debt forgiveness is on hold; What happens next?

President Joe Biden’s plan to forgive billions of dollars of student loan debt is unlawful and must be stopped, a federal judge ruled Thursday.

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In his ruling, U.S. District Judge Mark Pittman called the program an “unconstitutional exercise of Congress’s legislative power.”

The case was brought by two borrowers who were backed by the advocacy group Job Creators Network Foundation. The group filed the suit in October.

One of the borrowers in the suit did not qualify for the full $20,000 in debt relief and the other did not qualify for any debt relief.

The suit alleged the administration violated federal procedures by denying borrowers any opportunity to give public comment before the program was announced.

“In this country, we are not ruled by an all-powerful executive with a pen and a phone,” Pittman wrote in his order. “Instead, we are ruled by a constitution that provides for three distinct and independent branches of government.”

Biden’s program would allow up to 40 million borrowers to receive $10,000 of student loan forgiveness for those making less than $125,000 a year, or households making less than $250,000.

Pell Grant recipients will be eligible for an additional $10,000 in debt forgiveness.

White House press secretary Karine Jean-Pierre said in a statement following Thursday’s ruling: “We strongly disagree with the District Court’s ruling on our student debt relief program and the Department of Justice has filed an appeal. The President and this Administration are determined to help working and middle-class Americans get back on their feet, while our opponents — backed by extreme Republican special interests — sued to block millions of Americans from getting much-needed relief.”

Last month in a separate lawsuit, the U.S. Court of Appeals for the 8th Circuit granted a temporary stay against the loan forgiveness program. The suit, brought by six states, claimed Biden overstepped his authority with the plan, which threatened the revenue of state entities that profit from federal student loans.

What does the ruling mean to the student loan forgiveness program? Here’s what we know now.

What happens if I have already applied for forgiveness?

Right now, the program is frozen. According to the administration, the information provided by those who have applied will be held ready for processing when the program moves forward. However, it is not certain it will move forward.

What if I haven’t yet applied?

The student loan forgiveness program application website has a message that reads, “Student Loan Debt Relief Is Blocked.”

The Biden administration had encouraged those who qualify to apply for debt relief by Nov. 15. The Department of Education had set the deadline in hopes that the debt forgiveness applications would be processed prior to the lifting of the pause on student loan payments. The pause ends on Dec. 31.

Is the ruling the final decision?

The Biden administration is appealing the ruling to the U.S. Court of Appeals for the 5th Circuit.

Depending on whether that appeal fails or is successful, the U.S. Supreme Court could be asked to take up the case by either side.

How many people have applied for the program so far?

More than 26 million people have applied to have their student loans forgiven.

How many people have had loans forgiven?

More than 16 million have been approved to have loans forgiven, the White House said last week. No loan has been forgiven under the program yet.