The US Supreme Court on Friday struck down US President Joe Biden's 400 billion USD student loan forgiveness proposal. In a 6-3 ruling, the court said Biden's plan to wipe out debts for 26 million Americans was unconstitutional and an overreach of his executive power. Earlier, US Supreme Court also forbade race-based college admissions on Thursday. The US Supreme Court directed two major American universities, including Harvard, to do away with their race-conscious student admissions programmes which are intended to foster diversity on campus.

The ruling is another massive political setback for the US President and the Democratic Party, which was going into the 2024 election on the strength of a populist programme that allowed millions of students to pause loan payments during the pandemic, and later to forgive 10,000 USD in debt for individuals earning less than 125,000 USD  per year. The loan waiver doubled to 20,000 USD for low-income families receiving Pell Grants, a financial aid package for the relatively poor.

The administration had already approved 16 million applications of the nearly 26 million borrowers who have applied for loan forgiveness. In all, some 20 million would have emerged with a clean slate in a country where the high and rising cost of education has resulted in a 1.6 trillion USD debt owed by 45 million people.