SC rejects Biden’s plan to wipe away $400 bn in student loans

Washington: A sharply divided Supreme Court ruled on Friday that the Biden administration overstepped its authority in trying to cancel or reduce student loans for millions of Americans.

The 6-3 decision, with conservative justices in the majority, effectively killed the USD 400 billion plan, announced by President Joe Biden last year, and left borrowers on the hook for repayments that are expected to resume by late summer. The court held that the administration needs Congress’ endorsement before undertaking so costly a program.

The majority rejected arguments that a bipartisan 2003 law dealing with student loans, known as the HEROES Act, gave Biden the power he claimed.

“Six States sued, arguing that the HEROES Act does not authorise the loan cancellation plan. We agree,” Chief Justice John Roberts wrote for the court. Justice Elena Kagan wrote in a dissent, joined by the court’s two other liberals, that the majority of the court “overrides the combined judgment of the Legislative and Executive Branches, with the consequence of eliminating loan forgiveness for 43 million Americans.”

Loan repayments are expected to resume by late August under

a schedule.