President Biden has promised to “cancel” college student loan debt, but the nonpartisan Congressional Budget Office released an estimate Monday that shows how much the plan will actually cost American workers.
SO WHAT
Whether you voted for Biden or not, you’re going to be paying for his progressive agenda for a long time.
THE NUMBERS
The CBO estimated that Biden’s decision last month to extend the pause on federal student loan repayments through December and unilaterally cancel up to $20,000 in student loan debt for individual borrowers making less than $125,000 per year will cost taxpayers more than $400 billion over the next decade.
WHO WILL PAY?: The plan will shift the cost of repaying student loans from the borrowers to the national debt, and ultimately to American taxpayers.
- Deeper deficits will require more federal borrowing, adding to the country’s long-term debt and increasing the cost of interest payments, which must be covered by personal and corporate income taxes.
The CBO estimate of the cost of Biden’s plan came in lower than other high-profile analyses, but the White House nevertheless pushed back Monday.
- “We would be thrilled if 90% of eligible middle- and low-income Americans applied for this program,” it said in a memo. “But unfortunately, that’s unlikely based on the data from other programs.”
- The Biden administration has yet to offer its own cost estimate for the plan.
THAT OTHER THING
In addition to forcing working-class Americans to subsidize higher education for higher-income households, Biden’s plan will accelerate inflation, according to the Committee for a Responsible Federal Budget and a number of liberal economists.
- Student debt forgiveness raises the cost of higher education in particular by encouraging more borrowing and enabling schools to raise tuition and fees, per a 2017 study by the Federal Reserve Bank of New York.
