Biden's proposal to cancel $400 billion in student loans is rejected by the US Supreme Court; the President is likely to unveil fresh measures.

The US Supreme Court has blocked President Biden's plan to cancel $430 billion in student loan debt, ruling that the administration overstepped its authority.

On October 17, 2022, U.S. President Joe Biden makes a speech regarding the student loan forgiveness programme in a venue on the White House complex. Leah Millis at Reuters (Reuters)
 
The Supreme Court disallowed US President Joe Biden's proposal to forgive $430 billion in student loan debt, which presents a significant obstacle. The Biden administration had overstepped its bounds in attempting to reduce student loan debt for millions of Americans, the closely divided supreme court decided. The decision returned roughly $500 billion in debt to household balance sheets, and the President is now prepared to propose new measures to protect borrowers.
 
President Joe Biden's $400 billion plan, which was unveiled last year, would have eliminated up to $20,000 in federal student debt for 43 million people. Of those, 20 million people would have had all outstanding college loans forgiven. 

The 6-3 judgement found that the government requires Congress' approval before implementing such a costly programme, with conservative justices making up the majority. American households that owe $1.6 trillion in student loan debt may soon have to resume making hundreds of dollars a month in loan payments for the first time in more than three years, barring a congressional act.

While the action has now put the onus of repayment on the borrowers, it is expected to result in a significant decrease in this year's deficit - at least on paper. 

According to the Department of Education, deferring loan payments over the next ten years would cost taxpayers around $30 billion yearly, or roughly $2.5 billion each month, or about $305 billion overall. According to the Department, the net present value of the loan forgiveness over a ten-year period will be $379 billion.


In order to fund these expenditures, the US Treasury placed a $430 billion charge against the fiscal 2022 budget results last year. Additionally, the general COVID-19 payment freeze was extended through the end of 2022. The action resulted in


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