Budget Committee estimates $500 billion cost in Biden student loan forgiveness

Photo Credit: Gage Skidmore

According to a nonprofit that analyzes such plans, Joe Biden's plan to forgive student debt for millions of Americans and adjust repayment for others will cost roughly $500 billion.

If your household makes less than $250,000 per year or you make less than $125,000 per year, Biden says he will cancel up to $10,000 of student debt owed to the federal government.

According to the Committee for a Responsible Federal Budget, it will cost between $330 billion and $390 billion. 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.

As part of the plan, repayments will be adjusted to reduce the amount of loans more than $12,000 to be forgiven after 10 years of payments, down from 20 years. According to the nonprofit, that will cost between $90 billion and $190 billion.

There will be an additional $20 billion in costs associated with continuing the federal payment extension pause through December.

25 August 2022