The Status of Student Loan Forgiveness Just Changed Again

In a modest victory for the Biden administration, a federal judge has allowed a temporary restraining order against the new student loan forgiveness plan to expire. This development paves the way for the administration to proceed with finalizing the rule, potentially bringing relief to tens of millions of Americans burdened by student debt—just weeks before the November election. While this news is a promising step in the right direction, more lawsuits loom ahead.

What this news means for you

Wednesday's ruling stems from a lawsuit filed in September by seven Republican-led states to stop the Biden administration’s new student loan forgiveness rule. Backing up even further, that rule was an attempt to work around the Supreme Court's previous ruling against Biden's original sweeping student loan forgiveness plan.

Now, a federal judge in Georgia has ruled that a temporary restraining order—one that halted the program—will expire today. The expiration of the restraining order marks a promising step forward for the program, which aims to provide narrower, more targeted debt relief than its predecessor.

However, the path ahead remains uncertain. Most glaring, the Missouri court could still intervene to halt the program before it takes effect, and in general, additional legal challenges are anticipated. Despite these potential obstacles, the ruling allows Biden-Harris administration to move forward with debt relief as the November election approaches.

The proposed plan offers partial or full debt relief to borrowers in these circumstances:

• Borrowers who owe more than they did at the start of repayment

• Those who entered repayment on their undergraduate loans on or before July 1, 2005

• Those who entered repayment on their graduate loans on or before July 1, 2000

• People who are already eligible for student loan forgiveness under one of the government’s existing programs but just haven’t yet applied

• Students from “low-financial value” programs

The bottom line: While this represents a step towards limited loan forgiveness, the administration faces a complex legal landscape. The coming weeks will likely determine whether this new, more targeted approach can withstand the scrutiny of the courts and deliver the promised relief to student loan borrowers.