When the Biden administration announced its student loan forgiveness plan in August, it was an unprecedented move to help alleviate the $1.6 trillion worth of debt that borrowers hold. However, the forgiveness plan now faces multiple legal challenges and leaves 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 paused until the courts make a decision. Meanwhile, the Biden administration responded by extending the student loan payment pause yet again.
Below, Select breaks down what you need to know about these lawsuits and what borrowers should anticipate in the coming months.
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What's happening to student loan forgiveness?
First off, there are two notable lawsuits that borrowers should know about. One lawsuit was brought on behalf of six Republican-led states — Missouri, South Carolina, Nebraska, Arkansas, and Kansas. A panel of three judges placed an injunction on forgiveness on Nov. 14.
The injunction will remain in effect until further order of this court or the Supreme Court of the United States," write the judges for the U.S. Court of Appeals for the 8th Circuit.
In other words, the program is at a standstill until this court or another court makes a final decision on the case.
These six states are arguing that they will lose out on tax revenue as a result of forgiveness. The judges noted that Missouri may have a case. The state has a program, known as the Missouri Higher Education Loan Authority, that services and provides federal student loans. If forgiveness is instituted, Missouri could lose tax revenue because it'll have fewer accounts to service.
The Department of Justice then filed an appeal after the decision, requesting that the Supreme Court lift the injunction.
The injunction came just a few days after a judge at the U.S. District Court in Texas struck down the program on Nov. 10. This case was brought by two plaintiffs who weren't eligible for the full amount of forgiveness.
These plaintiffs claim that the Biden administration should have allowed the public to provide input on the program before it was passed. The lawsuit is backed by the Job Creators Network Foundation — an advocacy organization founded by Bernie Marcus, Home Depot co-founder and Republican donor.
Judge Mark Pittman ruled that the Secretary of Education is overstepping its authority by implementing forgiveness. The Biden administration is arguing that the Secretary of Education can eliminate borrowers' student balances 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 Appeal for More Financial Aid for College. "The impact of these two cases is to delay the forgiveness for now, until the court process plays itself out."
When will my student loan payments resume?
Since the status of student loan forgiveness remains in the air, the Biden administration has extended the student loan payment pause until the Supreme Court makes a ruling.
If forgiveness is implemented or the litigation is resolved, borrowers will have 60 days after that before their payments resume. If not, the pause will last until June 30, 2023, and borrowers will have 60 days after that before their payments restart.
The payment pause was previously set to end on Dec. 31, 2022, which the U.S. Department of Education called "a final extension."
The payment pause was first enacted by the Trump administration at the beginning of the Covid-19 pandemic in March 2020. Since then, the freeze has been extended seven times. Borrowers have been able to forgo student loan payments without worrying about interest accruing on their balances.
On Nov. 19, some of those who applied for forgiveness received a confirmation email from the Department of Education.
"We reviewed your application and determined that you are eligible for loan relief under the Plan. We have sent this approval on to your loan servicer. You do not need to take any further action," states the email from the Department of Education.
Secretary of Education Miguel Cardona tweeted that day, "beginning today, applicants and others seeking relief through the Biden-Harris Administration's Student Debt Relief Plan will begin receiving updates. Don't worry if you don't get an email today — more are coming."
If you have private student loans that are not eligible for forgiveness, you may consider refinancing them to receive a lower interest rate. However, it might not be the best time to refinance your federal student loans with a private lender because doing so means missing out on federal protections like forgiveness and the student loan payment pause.
Select ranked SoFi® Private Student Loan Refinancing and Earnest Student Loan Refinancing as some of the best companies for refinancing student loans.
- 0.25% autopay interest rate discount
- 0.125% SoFi Plus discount
- No origination fees, no late fees and no insufficient fund fees
- Private loans, which means you lose federal loan benefits
- $5,000 minimum loan amount
Fixed rates range from 4.49% APR to 10.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Variable rates range from 5.74% APR to 10.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Unless required to be lower to comply with applicable law, Variable Interest rates will never exceed 13.95% (the maximum rate for these loans). SoFi rate ranges are current as of 9/23/26 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. You may pay more interest over the life of the loan if you refinance with an extended term.
Autopay Discount: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly payments as outlined in your loan agreement by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. When the autopay interest rate deduction is added or removed, the next time the loan is re-amortized (quarterly for fixed rate loans; monthly for variable rate loans),the principal balance of your loan will be spread over the remaining loan term, and your monthly payment amount will change. This benefit is suspended during periods of deferment, grace period, or forbearance. Autopay is not required to receive a loan from SoFi.
Once you become eligible during the initial period, the discount will be removed or reinstated depending on whether the criteria have been met. Each time your loan is re-amortized, your monthly payment amount will change based upon the interest rate that was in place. SoFi reserves the right to modify or terminate this offer at any time for unenrolled participants. You are not required to meet these criteria to be approved for a loan.
Actual rate and available repayment terms will vary based on your financial profile. Our lowest rates are only available for the most credit qualified existing cosigned loan borrowers who receive the 0.25% Loyalty discount and requires selection of our shortest term offered, full principal and interest payment while in school, and enrollment in our 0.25% Auto Pay discount. Enrolling in Auto Pay is not required as a condition for approval. Interest rates are subject to change.
Residents of Hawaii must request a loan of at least $1,501.
You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. It is important to note that the 0.25% Auto Pay discount is not available when loan payments are deferred during the interim period as a result of selecting the deferred repayment option.
To be eligible for the Loyalty Discount, applicants must have previously obtained an Earnest Private Student Loan and apply using the same email address associated with that loan. Only one Loyalty Discount may be applied per eligible Earnest Private Student Loan. Not all applicants may qualify. This offer cannot be combined with Earnest's Rate Match program. Earnest may modify or discontinue this offer at any time and without notice, however, once a Loyalty Discount is earned, it will not be taken away.
Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.
Earnest clients may skip a payment through a single, one-month forbearance during a 12 month period. Your first request to skip a pay can be made once you've made at least 6 months of consecutive on-time full principal and interest payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Any unpaid accrued interest may capitalize (added to the principal balance) at the end of the forbearance period by adding unpaid accrued interest to the outstanding principal as permitted by law and the terms of the loan agreement. Please note that skipping a payment is not guaranteed and is at Earnest's discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.
Can I still apply for student loan forgiveness?
Shortly after the program was struck down, the Department of Education stopped accepting applications on its website.
"Courts have issued orders blocking our student debt relief program. As a result, at this time, we are not accepting applications. We are seeking to overturn those orders. If you've already applied, we'll hold your application," reads the Department of Education website.
If you have yet to apply for forgiveness, you may still be eligible to apply even if you can't right now. Prior to the application being shut down, the Department of Education claimed that borrowers had until Dec. 31, 2023 to apply.
You can sign-up for email updates on the application here: https://www.ed.gov/subscriptions
There have been 26 million borrowers who have applied for forgiveness and of those, 16 million have been approved, according to the White House.
Individuals making less than $125,000 and households earning less than $250,000 are eligible for up to $20,000 of relief. The amount of relief you receive depends on whether or not you received a Pell Grant, a federal grant for individuals from low-income backgrounds.
Bottom line
It may be a while before borrowers see student loan forgiveness reflected in their accounts as both lawsuits remain tied up in court. And if you're eligible for forgiveness but haven't applied yet, the application may open in the future. For now, borrowers may want to start saving and prepare for full repayment in case the forgiveness doesn't end up coming to fruition.
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* Fixed rates range from 4.49% APR to 10.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Variable rates range from 5.74% APR to 10.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Unless required to be lower to comply with applicable law, Variable Interest rates will never exceed 13.95% (the maximum rate for these loans). SoFi rate ranges are current as of 9/23/26 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. You may pay more interest over the life of the loan if you refinance with an extended term.
Autopay Discount: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly payments as outlined in your loan agreement by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. When the autopay interest rate deduction is added or removed, the next time the loan is re-amortized (quarterly for fixed rate loans; monthly for variable rate loans),the principal balance of your loan will be spread over the remaining loan term, and your monthly payment amount will change. This benefit is suspended during periods of deferment, grace period, or forbearance. Autopay is not required to receive a loan from SoFi.
Once you become eligible during the initial period, the discount will be removed or reinstated depending on whether the criteria have been met. Each time your loan is re-amortized, your monthly payment amount will change based upon the interest rate that was in place. SoFi reserves the right to modify or terminate this offer at any time for unenrolled participants. You are not required to meet these criteria to be approved for a loan.
