U.S. Supreme Court rejects plan to cancel $400B in student loans

The U.S Supreme Court handed President Joe Biden a painful defeat on Friday, blocking his plan to cancel $430 billion US in student loan debt — a move that had been intended to benefit up to 43 million Americans and fulfil a campaign promise.

The U.S Supreme Court handed President Joe Biden a painful defeat on Friday, blocking his plan to cancel $430 billion US in student loan debt — a move that had been intended to benefit up to 43 million Americans and fulfil a campaign promise.

The justices ruled against Biden in a 6-3 decision favouring six conservative-leaning states that objected to the policy. The court's action dealt blow to the 26 million U.S. borrowers who applied for relief after Biden announced the plan in August 2022 and a political setback for the Democratic president.

Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina challenged the debt relief plan, as did two individual borrowers opposed to the its eligibility requirements. The court acted on its final day of rulings in its term that began in October.

Twenty-six million U.S. borrowers applied for relief between when Biden announced the plan in August 2022 and last November, when lower courts blocked the plan.

The ruling came a day after the Supreme Court effectively prohibited affirmative-action policies long used by U.S. colleges and universities to raise the number of Black, Hispanic and other underrepresented minority students. Biden on Thursday said the court, with its conservative majority, was an institution out of touch with the country's basic values.