Biden Student Loan Forgiveness to Cost Roughly $500 Billion: Committee for a Responsible Federal Budget

President Joe Biden’s plan to forgive thousands of dollars in student debt for millions of Americans and adjust repayment for others will cost roughly $500 billion, according to a nonprofit that analyzes such plans.

Biden said he’ll cancel up to $10,000 of student debt owed to the federal government for households earning less than $250,000 per year and people earning less than $125,000 per year. That will cost the most: from $330 billion to $390 billion, according to the Committee for a Responsible Federal Budget.

Approximately 43 million people are eligible for the relief, with 20 million being poised to have their entire debt wiped out, according to Biden administration officials.

Another key part of the plan is adjusting repayments, including forgiving all loans at or less than $12,000 after 10 years of payments are made, down from 20 years. That will cost an estimated $90 billion to $190 billion, according to the nonprofit.

The last prong of Biden’s plan, keeping the federal payment extension pause in place through December, is pegged to cost an additional $20 billion.

“The changes announced today will likely cost more than double the amount saved through the recently passed Inflation Reduction Act, completely eliminating any disinflationary benefit from the bill,” stated the committee, which describes itself as nonpartisan.

“We will be releasing an inflation estimate of these student debt changes in a subsequent analysis, but the package is likely to increase inflation by more than a year-long extension of the pause, which we previously estimated would add up to 20 basis points to the Personal Consumption Expenditure inflation rate. The proposed loan changes also do nothing to reduce the amount of borrowing moving forward, setting up a future administration to be called on to cancel debt again.”

White House on Cost

White House officials said

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