The temporary restraining order (TRO) blocking the Biden administration’s student debt relief plan has been extended by a federal judge this week.
The original order was issued on September 5th following a lawsuit filed by seven GOP-led states attempting to block the Biden administration’s student loan forgiveness plan. The order initially blocked the forgiveness program for 14 days but has now been extended.
Biden Won’t Be Able to Deliver on His Promise
The Biden administration issued letters to borrowers who would have qualified for forgiveness in early August, informing them that they needed to let their servicer know by August 30th if they wanted to opt out of the forgiveness program.
This latest debt relief plan would have automatically forgiven some or all student loan balances for borrowers who:
- owe more on their loans than when they began repayment,
- have been in repayment for 20 years,
- would have qualified for loan forgiveness but didn’t apply, or
- are enrolled in low-financial-value programs.
The Biden administration takes credit for providing $168.5 billion in debt relief to 4.7 million borrowers through PSLF, IDR adjustment, BDR, and disability. The administration promised to provide additional relief to tens of millions of borrowers this fall, but that seems unlikely due to the upcoming election and current court actions.
SAVE Plan Court Case is Still Pending
The $168.5 billion also includes $5.5 billion for 414,000 borrowers through the SAVE plan, another Biden administration initiative blocked by GOP-led states.
The SAVE plan was an income-driven repayment option with more generous features, including lower monthly payments and a faster time to loan forgiveness. Multiple appellate courts have issued injunctions temporarily blocking the SAVE plan, and the Supreme Court denied an emergency request to vacate the injunction.
A court hearing is set for October 24, where a ruling is expected from the 8th Circuit Court of Appeals. However, the case is likely to be escalated to the Supreme Court.
The Election Will Impact the Future of Student Debt Relief
The upcoming election will have an impact on student loan forgiveness. If the Democrats take control of Congress and the White House, Kamala Harris could secure legal standing to overturn the court decisions. However, if the Republicans win in November, drastic changes are possible. Project 2025 outlines actions that could lead to eliminating student loan forgiveness programs.