EXPLAINER: Where does the student loan debt plan stand?

President Joe Biden’s plan to provide millions of borrowers with up to $20,000 apiece in federal student-loan forgiveness has been blocked by a second federal court, leaving millions of borrowers to wonder if they’ll get debt relief at all.

On Thursday, U.S. District Judge Mark Pittman ruled that the program usurped Congress’ power to make laws. The administration immediately filed a notice to appeal.

It’s not the only challenge the plan faces. Last month, the 8th U.S. Circuit Court of Appeals in St. Louis put loan forgiveness on temporary hold while it considers a challenge from six Republican-led states.

The fate of the plan will likely eventually end up in the Supreme Court, meaning a final decision is a ways off.

Here’s where things stand:

HOW THE FORGIVENESS PLAN WORKS

The debt forgiveness plan announced in August would cancel $10,000 in student loan debt for those making less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically demonstrate more financial need, would get an additional $10,000 in debt forgiven.

College students qualify if their loans were disbursed before July 1. The plan makes 43 million borrowers eligible for some debt forgiveness, with 20 million who could get their debt erased entirely, according to the administration.

The Congressional Budget Office has said the program will cost about $400 billion over the next three decades.

The White House said 26 million people have applied for debt relief, and 16 million people had already had their relief approved.

THE TEXAS CASE

Pittman — an appointee of former President Donald Trump based in Fort Worth, Texas — made it clear that he felt Biden overstepped his authority. He said the Higher Education Relief Opportunities for Students Act of 2003, commonly known as the HEROES Act, did not provide the authorization for the loan forgiveness program.

The law allows the secretary of education to waive or modify terms of federal student loans in times of war or national emergency. The administration said the COVID-19 pandemic created a national emergency.

But Pittman said such a massive program required clear congressional authorization.

THE PLAN FACES MANY OTHER LEGAL CHALLENGES

In September, the Republican- led states of Nebraska, Iowa, Kansas, Missouri, Arkansas and South Carolina filed suit to halt the program, arguing that the pandemic no longer qualifies as a national emergency. Justice Department attorney Brian Netter disagreed, telling U.S. District Judge Henry Autrey in October that student loan defaults have skyrocketed over the past 2 1/2 years.

Autrey ruled on Oct. 20 that the states lacked standing, allowing the forgiveness plan to proceed. But the 8th Circuit temporarily halted it the next day while it considers a permanent block. That decision is still pending.

The White House encouraged borrowers to continue applying for relief, saying the court order did not prevent applications or the review of applications.

The plan has faced other legal challenges. In October, Supreme Court Justice Amy Coney Barrett rejected an appeal from a Wisconsin taxpayers group. A federal judge had earlier dismissed the group’s lawsuit, finding they didn’t have the legal right, or standing, to bring the case.

THE TEXAS RULING WAS A BIGGER BLOW TO THE PLAN

Pittman’s decision strikes down the underlying legal argument used to justify Biden’s plan. Previously, the White House has been able to dodge legal attacks made in lawsuits by tweaking details of the program.

One lawsuit argued that the automatic debt cancellation would leave borrowers paying heavier taxes in states that impose a tax on canceled debt. The administration responded by allowing borrowers to opt out. Another suit alleged that Biden’s plan would hurt financial institutions that earn revenue on certain kinds of federal student loans. The White House responded by carving those loans out of the plan.

The new ruling, however, argues that the HEROES Act does not grant authority for mass debt cancellation. The law grants the Education Department wide flexibility during national emergencies, but the judge ruled that it’s unclear whether debt cancellation was a necessary response to COVID-19, noting that Biden recently declared the pandemic over.