US Supreme Court casts doubt over Biden's student loan plan

Plan would provide relief to millions of borrowers in America

Protesters outside the US Supreme Court in Washington on February 28. Bloomberg

The US Supreme Court's conservative majority appears to be sceptical over whether President Joe Biden student loan debt forgiveness plan is Constitutional.

Under the plan, US borrowers earning less than $125,000 a year could have $10,000 of their federal student loans forgiven.

That number would increase to $20,000 for recipients of the Pell Grant, which are awards given to low-income students.

The programme would be authorised under a 2003 law called the Heroes Act, which would allow the Education Secretary to “waive or modify” federal loans in the event of a national emergency.

But the high court's judges, led by Chief Justice John Roberts, on Tuesday questioned the legality of the programme that would affect millions of borrowers.

“We're talking about half a trillion dollars and 43 million Americans. How does that fit under the normal understanding of 'modify'?” Mr Roberts asked US Solicitor General Elizabeth Prelogar who was appearing on behalf of the Biden administration.

Justices also challenged the administration under the so-called major-questions doctrine, which requires Congress to provide authorisation for a federal agency to act on something that would be of major national significance.

Justice Samuel Alito questioned Ms Prelogar under this doctrine.

"Of course, we acknowledge that this is an economically significant action," she said.

"But I think that can't possibly be the sole measure for triggering application of the major-questions doctrine."

Sonia Sotomayor, one of the court's liberal justices, also pressed on the issue of the major-questions doctrine.

Justice Brett Kavanaugh said Congress, in the Heroes Act, did not specifically authorise loan cancellation or forgiveness, and that the Biden administration pursued a “massive new programme”.

“That seems problematic,” Mr Kavanaugh said.

Before arguments on Tuesday, the White House tweeted that it is confident in the legality of the programme and said it would deliver relief to millions of borrowers.

The student loan forgiveness programme fulfilled a campaign promise made by Mr Biden when he ran for president.

Some critics said that it only benefited some Americans and that it was unfair to those who had already paid off their student loans.

The hearings came after two lower courts blocked the plan last year. The first challenge involved six Republican-led states, and the second two individual borrowers.

The Supreme Court is expected to rule on the matter in the summer.

Reuters contributed to this report