The Supreme Court agreed on Thursday to decide whether the Biden administration can broadly cancel student loans, keeping the programme blocked for now but signalling a final answer by early summer.
That is about two months before the newly extended pause on loan repayments is set to expire.
The administration had wanted a court order that would have allowed the programme to take effect even as court challenges proceed. The justices did not do that, but agreed to the administration's fallback, setting arguments for late February or early March over whether the programme is legal.
President Joe Biden’s plan promises US$10,000 in federal student debt forgiveness to those with incomes of less than US$125,000, or households earning less than US$250,000. The Congressional Budget Office has said the program will cost about US$400 billion over the next three decades.
More than 26 million people already applied for the relief, with 16 million approved, but the Education Department stopped processing applications last month after a federal judge in Texas struck down the plan.
The administration said it was pleased the nation's highest court had intervened, and Biden said on Twitter that the White House will keep fighting for the loan plan.
“Republican officials are throwing up roadblocks in order to prevent middle-class families from getting the student debt relief they need,” he said in a tweet.
The Texas case is one of two in which federal judges have forbidden the administration from implementing the loan cancellations.
In a separate lawsuit filed by six states, a three-judge panel of the 8th US Circuit Court of Appeals in St Louis also put the plan on hold, and that case is before the Supreme Court.
The moratorium had been slated to expire on January 1, a date that Biden set before his debt cancellation plan stalled in the face of legal challenges from conservative opponents.
The new expiration date is 60 days after the legal issue has been settled, but no later than the end of August. (AP)