The student debt forgiveness plan was blocked after it appeared to clear a number of legal hurdles.
The Department of Justice is appealing on Biden's behalf after a federal district court in Texas ruled that the plan was unconstitutional. The 8th Circuit Court of Appeals continued an existing pause on the relief while it considered the arguments in the lawsuit.
The president had said that he would reduce debt balances as soon as possible. Many questions remain as to what comes next after the administration maintained its legal authority and said it was still fighting for borrowers.
Two people who are backed by the Job Creators Network Foundation are in the Texas case, and they claim the forgiveness plan excludes them.
A group of six states claim that the forgiveness would hurt them in the form of lost tax revenue.
Both suits argue the same thing despite the surface differences, according to an attorney at the National Consumer Law Center. She tells CNBC Make It that they are challenging the authority of the Biden administration.
More waiting is what it's basically. 16 million of the 26 million applications that the administration has received have already been approved and forwarded to loan servicers.
There isn't anything else borrowers can do but wait. It is expected that the Supreme Court will eventually have to act. If both courts agree, that outcome will be less likely.
If the president is successful in his appeal in Texas, the case could go to the Supreme Court.
The trajectory is hard to say at this point, but we are encouraged that the administration has appealed.
There are other steps that the administration needs to be taking to protect borrowers, but it is a good step.
Biden could have chosen a different method or legal justification to give relief to borrowers that wouldn't have faced legal challenges, according to some debt forgiveness proponents.
Lawyers and legal experts have doubts about the judges interpretations of the law.
The lower courts challenged the standing of the people who sued. These weren't "liberal courts" that were accused of being partisan for siding with the president.
Every other court that has considered this has reached a different conclusion according to Yu. It speaks more to the judge than it does to the legality of the issue, but in a broader context we have seen the court systems being politicized.
Though student debt affects people from both sides of the political aisle, support for the government action to ease the burden on borrowers frequently falls along party lines, with Democrats around twice as likely to support debt forgiveness than Republicans
Non-partisan courts are supposed to exist. The judges who struck down Biden's debt forgiveness were nominated by Republicans. Forgiveness has become more of a political debate according to many commentators.
None of the parties who filed suit so far actually have standing, according to Shafroth. All of these cases should be stopped. If we are just looking at this as a black and white matter of the law, then they should all be dismissed.
The debt forgiveness plan has not yet been announced by the president despite his appeal in Texas.
According to a statement from the White House Press Secretary, the administration has legal authority and will never stop fighting for Americans who need it the most.
Since March of 2020, the payment pause has not been announced by the administration. On December 31 of this year, it will be expired.
The Washington Post is reporting that officials in the administration are considering an extension of the payment pause. The discussions are preliminary and not focused on an indefinitely paused.
It could undermine the administration's reasoning for forgiveness if payments are turned back on.
She says that the debt relief program was designed to alleviate the burden of restarting a repayment plan. The payment pause would have to be extended so that the administration could figure out a way to give relief to borrowers.
The Department of Education referred CNBC Make It to a statement from the Secretary of Education in the U.S. The Department of Education wouldn't say if the payment paused would continue.
Under Biden's plan, federal loan borrowers would see their student debt reduced. Their monthly payments could be lowered as a result. The administration showed that restarting repayments would lead to higher delinquency and default rates.
With just over a month before payments are due to resume, borrowers who were already struggling financially may be forced to make room for student loans in their budgets.
It would be a catastrophic number of borrowers who would default and then, given the consequences, I think we would see a huge impact for a lot of people.
While the legal challenges play out, advocacy groups want Biden to extend the payment pause. Some people think Congress could help borrowers as well.
Rebecca Natow is a higher education policy expert and assistant professor of educational leadership and policy.
It would be difficult to get Congressional approval. The House and Senate will be in Democratic control through the end of the year.
Natow thinks that Congress could give the Biden administration authority.
It is definitely doable. The Supreme Court is less likely to rule on the legality of the forgiveness plan if the Justice Department appeals those outcomes.
The highest court may have to resolve the dispute if one court finds the plan illegal.
Shafroth says that they would want to resolve that inconsistency so that there is a single rule for the country. She says that the 8th Circuit Court's decision to keep the block on debt forgiveness in place adds to the likelihood of a Supreme Court case.
Shafroth says that it is more likely that one of the cases will reach the Supreme Court, but it is still too early to say.
Biden's debt forgiveness plan has not yet been thoroughly reviewed by the Supreme Court.
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