American Rescue Plan Act Section 1005 Litigation FAQ

Frequently Asked Questions

Preliminary injunctions issued in federal district court cases have halted the United States Department of Agriculture (USDA) from making debt relief payments under Section 1005 of the American Rescue Plan Act.

About Section 1005 of the American Rescue Plan Act: 

  • The American Rescue Plan program responds to decades of well-documented discrimination against socially disadvantaged farmers and ranchers by USDA. 
  • The American Rescue Plan seeks to address discrimination by giving USDA new tools and resources. The law provides USDA direction to deliver debt relief to socially disadvantaged farmers and ranchers who hold a qualifying farm loan.
  • The American Rescue Plan also provides additional money and direction to USDA to begin a long-term effort to advance equity and remove systemic discrimination from its programs; part of this long-term effort will be led by an independent equity commission. 

How does this litigation affect debt relief?

  • USDA will continue to educate borrowers about the program. Borrowers should continue to submit signed loan payment notification letters and USDA will continue to accept these letters and process them. USDA will be prepared to provide the debt relief authorized by Congress at the earliest opportunity, depending on the ongoing litigation.
  • The payment timeline will be updated as we receive updates regarding this litigation. When we announced the payment process, we expected that once FSA received a signed loan payment notification letter, it would take FSA approximately 3 weeks to pay off a loan and issue a payment to a borrower.

Should borrowers continue to make payments on loans? 

  • Borrowers have options. USDA is not currently taking any action to foreclose on any borrower who does not make payments on Direct Farm Loan Programs loans or Farm Storage Facility Loans under the current suspension in place due to the COVID-19 pandemic. FSA has suspended all foreclosure, debt collection, and other adverse actions for direct Farm Loan Programs loans and Farm Storage Facility Loans.
  • You are encouraged to continue making payments if you can do so, or to contact your local FSA office to discuss available loan servicing options if you are unable to make your payment. While FSA has suspended foreclosure actions, a delinquency on federal debt may negatively affect the ability of a borrower to obtain additional Farm Loan Programs loans and credit from other federal agencies. For FSA Guaranteed Loans, borrowers should make all regularly scheduled payments as agreed to with your lender. You could also ask them about possible loan servicing options.
  • Payments will still be calculated in accordance with ARPA Section 1005 based on the borrower’s outstanding indebtedness on January 1, 2021. Direct borrowers will be reimbursed for any loan payments made after January 1, 2021.

To learn more about the loan payments to socially disadvantaged farmers and ranchers, visit www.farmers.gov/americanrescueplan.