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In a ruling, the Supreme Court, sharply divided in a 6-3 decision, dealt a decisive blow to the Biden administration's ambitions to cancel or reduce student loans for millions of Americans. The conservative justices formed the majority and asserted that the administration had exceeded its authority in pursuing the USD 400 billion plan announced by President Joe Biden last year. As a result, borrowers are now facing the responsibility of repaying their loans, a burden expected to resume by late summer.

The Supreme Court emphasized that such an ambitious program requires direct endorsement from Congress, rejecting arguments that the HEROES Act of 2003 provided President Biden with the authority he claimed. Chief Justice John Roberts, writing for the majority, stated that the loan cancellation plan was not authorized by the HEROES Act, concurring with the six states that brought the lawsuit.

However, Justice Elena Kagan, along with the court's two other liberals, dissented strongly, expressing concerns about the majority's decision overriding the combined judgment of the Legislative and Executive Branches. The consequence of this ruling is the elimination of loan forgiveness for a staggering 43 million Americans.

The resumption of loan repayments, set by the administration's initial schedule and tied to the debt ceiling agreement, is expected by late August. These payments have been on hold since the onset of the coronavirus pandemic over three years ago.

The proposed forgiveness program aimed to cancel USD 10,000 in student loan debt for individuals with an income below USD 125,000 or households earning less than USD 250,000. Pell Grant recipients, known for demonstrating greater financial need, would have received an additional USD 10,000 in debt forgiveness. The administration reported that 26 million people had applied for relief, and an astonishing 43 million would have been eligible, resulting in an estimated cost of USD 400 billion over 30 years.