Biden's student loan cancellation plan to cost $400B, Congressional Budget Office estimates

  • In Politics
  • 2022-09-26 23:36:33Z
  • By NBC News

WASHINGTON - President Joe Biden's plan to forgive $10,000 in federal student debt for most borrowers will cost the government about $400 billion, the nonpartisan Congressional Budget Office said in an estimate released Monday.

The CBO's evaluation of the administration's policy said the price tag is "a result of the action canceling up to $10,000 of debt issued on or before June 30, 2022."

The president's plan covers borrowers with income below specified limits and an additional $10,000 forgiven for those who also received at least one Pell Grant, CBO Director Phillip Swagel said.

"Reduced cash inflows to the Treasury will increase the amounts that the federal government borrows over time," he said Monday.

As of the end of June, 43 million borrowers held $1.6 trillion in federal student loans and about $430 billion of that debt will be canceled, the CBO estimated.

In a joint statement, Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Elizabeth Warren, D-Mass., argued the CBO's estimate made clear that middle-class Americans will have "more breathing room."

"In contrast to President Trump and Republicans who gave giant corporations $2 trillion in tax breaks, President Biden delivered transformative middle class relief by cancelling student debt for working people who need it most - nearly 90% of relief dollars will go to those earning less than $75,000 a year," they said.

"We don't agree with all of CBO's assumptions that underlie this analysis, but it is clear the pandemic payment pause and student debt cancellation are policies that demonstrate how government can and should invest in working people, not the wealthy and billionaire corporations," the two Democrats added.

However, the Committee for a Responsible Federal Budget, a group that advocates for lower deficits, said the CBO's predictions confirm "the outrageous cost" of Biden's student loan plan.

"As CBO's estimates help confirm, the President's student debt plan would wipe out the ten-year savings from the Inflation Reduction Act twice over, worsen inflationary pressures, and deliver benefits to millions of Americans with advanced degrees in upper-income households," said its president, Maya MacGuineas. "This might be the most costly executive action in history. It's unacceptable that the President would implement it without offsets and without Congressional approval."

The administration's plan, which also calls for extending a pause on payments through the end of the year at an estimated cost of $20 billion, has drawn equally sharp criticism from Republicans who argue it will add to inflation.

GOP lawmakers highlighted the added cost to taxpayers just a few weeks out from the midterm elections amid historically high inflation.

"The Biden Administration's student debt bailout is even more expensive than we initially thought," tweeted Rep. Andy Biggs, R-Ariz. "The current bailout will cost Americans $420 BILLION, according to the CBO. This is likely the most expensive executive action in American history."

Rep. Mariannette Miller-Meeks, R-Iowa, tweeted, "President Biden isn't forgiving student loans-he's charging hardworking Americans $400 billion."

This article was originally published on


More Related News

Rural voters
Rural voters 'in the trenches' on climate, leery of Biden

Drought in California meant Raquel Krach, a rice farmer and graduate student in the Sacramento Valley, planted very little. The 53-year-old Democrat said...

Paul Whelan: US and Russia to explore more prisoner swaps
Paul Whelan: US and Russia to explore more prisoner swaps

President Joe Biden's administration tells Paul Whelan, convicted of espionage, to "keep the faith".

U.S. Supreme Court to consider prohibition on encouraging illegal immigration
U.S. Supreme Court to consider prohibition on encouraging illegal immigration
  • US
  • 2022-12-09 21:38:34Z

The U.S. Supreme Court on Friday agreed to hear a bid by President Joe Biden's administration to revive a federal law that makes it a criminal offense to...

U.S. lawmakers urge Biden to guarantee rail workers
U.S. lawmakers urge Biden to guarantee rail workers' sick leave

WASHINGTON (Reuters) -More than 70 lawmakers including Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez on Friday urged President Joe Biden...

Families of wrongfully detained Americans in China demand Griner-style prisoner swap
Families of wrongfully detained Americans in China demand Griner-style prisoner swap

Relatives accuse Biden administration of foot-dragging in seeking jailed Americans' release.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


Top News: Politics