US Supreme Court Blocks Biden's $400 Billion Student Loan Relief Plan: Report

The plan was aimed at delivering up to $20,000 of relief to millions of borrowers struggling with outstanding debt in the aftermath of the Covid pandemic. 

A sign reading Cancel Student Debt is staged outside of the Supreme Court of the United States in Washington ( Image Source :Getty )

The US Supreme Court on Friday struck down President Joe Biden's student loan debt relief plan. In a 6-3 decision, the court said the Biden administration overstepped its authority in trying to cancel or reduce student loans for millions of Americans.

The programme, announced in August 2022, was aimed at delivering up to $20,000 of relief to millions of borrowers struggling with outstanding debt in the aftermath of Covid. The move would have benefitted up to 43 million Americans.

A White House official told Reuters that Biden was likely to announce new actions on Friday to protect student loan borrowers in the wake of the ruling.

Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina had challenged Biden's debt relief. From August 2022 to November, 26 million US borrowers had applied for relief.

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During the hearing, the US top court rejected the Biden administration's arguments that the student debt relief plan was legally valid under a 2003 law called the Higher Education Relief Opportunities for Students Act, or HEROES Act. Chief Justice John Roberts said the language of the HEROES Act was not specific enough, a report in NBC News said.

As per the HEROES Act, the US government can provide relief to recipients of student loans when there is a "national emergency", allowing it to act to ensure people are not in "a worse position financially" as a result of the emergency.

In her dissenting judgment, Justice Elena Kagan said that by ruling against the plan, the court had "exceeded its proper limited role in our nation's governance", NBC News reported.

"The result here is that the court substitutes itself for Congress and the executive branch in making national policy about student-loan forgiveness," Kagan wrote.

The Supreme Court's move comes as a setback to Biden as tackling student loan debt was a key pledge he made during his campaign trail in 2020 to woo young voters.