Here’s How Much Joe Biden’s Student Loan Cancellations Cost

The Biden administration’s plan to cancel student debt is estimated by the Congressional Budget Office (CBO) to cost the U.S. federal government over $400 billion over the next 30 years.

Biden’s plan, announced in August, involves providing up to $10,000 in debt relief to borrowers who earn less than $125,000 per year, or $20,000 in debt relief to Pell Grant recipients who meet similar income standards. An application to receive the benefit is expected in early October.

“As of June 30, 2022, 43 million borrowers held $1.6 trillion in federal student loans. About $430 billion of that debt will be canceled, CBO estimates,” CBO Director Phillip Swagel told Republican lawmakers in a letter on Monday (pdf), in response to a request for figures.

“In its May 2022 baseline, CBO projected that for many borrowers in income-driven repayment plans, a portion of the amounts canceled through executive action would eventually be forgiven anyway,” he added. “CBO also projected that many borrowers in fixed-length repayment plans would accrue and pay interest on the principal amounts canceled through executive action. Because of the executive action, those borrowers will now pay less in principal and interest than the amounts estimated in the baseline.” (Read more from “Here’s How Much Joe Biden’s Student Loan Cancellations Cost” HERE)

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