US Supreme Court blocks Biden student loan plan

The US Supreme Court handed President Joe Biden a painful defeat on Friday, blocking his plan to cancel $430 billion in student loan debt - a move that had been intended to benefit up to 43 million Americans and fulfill 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 a blow to the 26 million US borrowers who applied for relief after Biden announced the plan in August 2022 and a political setback for the Democratic president.

Conservative Chief Justice John Roberts, joined by the rest of the court's conservative members, wrote the ruling over a dissent from the court's three liberals.

"From a few narrowly delineated situations specified by Congress, the secretary has expanded forgiveness to nearly every borrower in the country," Roberts said, referring to the US education secretary.

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

Biden's plan fulfilled his 2020 campaign promise to cancel a portion of $1.6 trillion in federal student loan debt but was criticised by Republicans who called it an over-reach of his authority and an unfair benefit to college-educated borrowers while other borrowers received no such relief. 

Under the plan, the US government would forgive up to $10,000 in federal student debt for Americans making under $125,000 who obtained loans to pay for college and other post-secondary education and $20,000 for recipients of Pell grants to students from lower-income families.

The ruling came a day after the Supreme Court effectively prohibited affirmative action policies long used by US 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.