US President Joe Biden announces new measures for student loan relief after Supreme Court setback

After millions of Americans expressed anger over Supreme Court bringing down the student loan relief programme, United States President Joe Biden announced new measures to ease the financial burden.

"I know there are millions of Americans in this country who feel disappointed and discouraged or even a little bit angry," Biden said. "I must admit I do too."

He announced measures to "provide student debt relief to as many borrowers as possible, as quickly as possible."

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One of the measures is a 12-month pause on penalties for missing debt repayments on federal loans used by many students to finance their time in the expensive US higher education system.

This will "protect the most vulnerable borrowers," the White House said.

Another measure announced is a change to the repayment plans by the Department of Education, with a cut in the percentage of borrower's available income that must be paid each month toward loans from 10 to five per cent.

In addition, the borrowers would now see more of their income safeguarded from having to be made available for repayments.

Supreme court rejects Biden's $400bn student debt cancellation plan

US President Joe Biden on Friday suffered a significant political setback as US Supreme Court overruled his key programme to cancel the student loans of millions of Americans.

The court said Biden had overstepped his powers in cancelling more than $400 billion in debt, in an effort to alleviate the financial burden of education that hangs over many Americans decades after they finished their studies.

The court said Biden was mistaken in using a 2003 law, the Higher Education Relief Opportunities for Students Act, to justify the debt relief plan.

Six Republican-led states sued saying the 2003 Act, which aimed to help former students who joined the military after the September 11, 2001 attacks, does not authorise Biden's loan cancellation.

"We agree," Chief Justice John Roberts wrote in the majority opinion.

"The question here is not whether something should be done; it is who has the authority to do it," he said.

Biden said his administration would pursue a different way to achieve his goal.

"Today’s decision has closed one path. Now we’re going to start another," Biden told reporters. "I believe the court's decision to strike down my student debt relief program was a mistake, was wrong. I'm not going to stop fighting to deliver borrowers what they need, particularly those at the bottom end of the economic scale."

Biden announced the student loan cancellation plan in August 2022. He said that up to USD 20,000 per borrower would be forgiven, given that the borrower comes from low or middle-income groups.

The plan came on the back of a student loan payment freeze instituted by his predecessor Donald Trump during the COVID-19 pandemic.

(With inputs from agencies)

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