Biden's student loan forgiveness plan faces opposition before its release. Here's what may occur next.

• On Sept. 5, a temporary restraining order was issued by U.S. District Judge Randal Hall in Augusta, Georgia, halting President Joe Biden's second attempt to erase student debt for millions of Americans.
• The final rule for the revised student loan forgiveness plan, which will affect over 25 million Americans, is expected to be published by the administration in October.
• Here's what borrowers need to know about what could happen next.

This summer, federal student loan borrowers received an email from the Biden administration, stating that debt forgiveness was imminent and they might qualify.

A Republican-led challenge has temporarily blocked the U.S. Department of Education from publishing its final rule on debt relief and implementing its new loan forgiveness plan.

Here's what we know so far.

Relief plan blocked until at least mid-September

On Sept. 5, U.S. District Judge Randal Hall in Augusta, Georgia, granted a temporary restraining order against President Joe Biden's second attempt to cancel student debt for millions of Americans. The Biden administration had previously attempted to provide comprehensive student debt relief in 2022.

Hall, appointed by former Republican President George W. Bush, was addressing a lawsuit filed by seven Republican-led states against the relief package. These states, including Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota, and Ohio, claimed that the U.S. Department of Education's new debt cancellation initiative, like its previous attempts, is unlawful.

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The Biden administration's plan was blocked by Hall until a Sept. 18 hearing, as the states presented a compelling argument that the department exceeded its authority, according to Hall.

Luke Herrine, an assistant professor of law at the University of Alabama, stated that the court has only issued a temporary restraining order and the scope of the order is unclear.

Herrine stated that the administration can proceed with finalizing the rule and preparing to cancel the debt. However, it is unlikely to start forgiving loans until the courts determine the rule's legality, which could take months, experts predict.

The Department of Education did not immediately respond to a request for comment.

In June 2023, the Supreme Court declared Biden's plan to cancel approximately $400 billion in federal student debt as unconstitutional. Following this decision, Biden pledged to explore alternative methods to provide relief to borrowers.

Biden's initial effort to relieve student debt was through an executive order. However, his current administration is taking a different approach by going through the regulatory process, which they believe will make their relief plan more resistant to legal challenges.

The Education Department had planned to release its final rule on the revised student loan forgiveness plan in October, which would affect more than 25 million Americans. However, state attorneys general in a lawsuit claimed they found evidence that the department had instructed federal loan servicers to start canceling loans as early as September.

Legal experts believe it's unlikely that the Biden administration would deviate from the regulatory process timeline.

"I strongly doubt that this allegation is true," Herrine said.

The loan servicers were instructed by the administration to be ready to forgive the debt once the rule is finalized, it was stated.

Borrowers in limbo, again

The future of the Biden administration's student loan forgiveness plan remains uncertain.

The SAVE plan, a new affordable repayment option for student loan borrowers introduced by the Biden administration, is currently being contested in court by GOP-led legal challenges. As a result, those enrolled in the plan are temporarily exempt from making payments.

Currently, the Biden administration's plans to provide relief to borrowers before the 2024 presidential election are facing obstacles.

That may be part of the point, Herrine said.

Herrine stated that the GOP recognizes the popularity of student debt cancellation and aims to prevent the Biden administration from implementing such popular measures.