A lawsuit filed by Arkansas, Missouri, Nebraska, Iowa, Kansas and South Carolina argued that the debt forgiveness plan would adversely affect state-based loan companies that may manage federal loans. This lawsuit culminated in an injunction issued by the 8th Circuit Court of Appeals, blocking the student debt relief program. As such, the administration encouraged the Supreme Court to rule on the student debt forgiveness case to provide clarity for borrowers across the country.
U.S. Secretary of Education Miguel Cardona criticized the program’s legal challenges, characterizing them as “callous efforts to block student debt relief.” The Education Secretary underscored that the payment pause will extend “because it would be deeply unfair to ask borrowers to pay a debt that they wouldn’t have to pay, were it not for the baseless lawsuits brought by Republican officials and special interests.”
In response to the litigation, the Department of Education (DOE) outlined that student debt payments will resume 60 days after the student debt forgiveness plan is permitted or the pending litigation resolves. The Supreme Court of the United States is expected to consider the case in its current term. Should the program’s litigation go unresolved by the June 2023 deadline, payments are set to renew 60 days later; however, further extensions could be announced.
