Report: Biden’s Student Loan Forgiveness to Cost $400B
On Monday, the nonpartisan Congressional Budget Office (CBO) announced it estimates Biden’s plan to forgive significant amounts of student loan debt will cost around $400B over the next 30 years, and the extension of the student-loan repayment pause could add $20B to that total.
Facts
- On Monday, the nonpartisan Congressional Budget Office (CBO) announced it estimates Biden’s plan to forgive significant amounts of student loan debt will cost around $400B over the next 30 years, and the extension of the student-loan repayment pause could add $20B to that total.
- The plan cancels $10k in federal loan debt for those making less than $125k per year, and forgives $20k for those who have received a Pell Grant for low-income families.
- The CBO says approximately 90% of the 37M eligible borrowers will opt into the program, but the White House believes fewer will participate.
- It’s expected that the canceled loans will be added to the federal deficit. Experts are divided over what effect this will have on the economy, with some saying it’ll create higher interest rates and inflation, while others argue the US has run a deficit since 2001 without it having a major impact.
- Republicans, long opposed to student-loan forgiveness, have vowed to pass a bill to roll back Biden’s plan if they take control of one or both houses of Congress in this fall’s midterm elections.
Sources: New York Times, Newsweek, and Daily Caller.
Narratives
- Republican narrative, as provided by New York Post. This latest report bolsters the concerns surrounding Biden’s student loan forgiveness program, which is going to crush the economy and intensify inflationary pressure. Biden isn’t canceling student debt, he’s simply shifting it onto the shoulders of American taxpayers. Legislators at the federal and state level must do what they can to block this policy decision.
- Democratic narrative, as provided by CBS. This report is an estimate and should be taken with a grain of salt. Even the CBO admits its analysis is “highly uncertain” because it doesn’t take into account the number of people who will repay their debt after some of their loans are forgiven, and it also assumes that 65% of borrowers who qualified for a Pell Grant received one. Student debt relief is still vital to strengthening the middle class.
