The price of a federal student loan cancellation program drafted by President Biden could cost up to $ 400 billion, the Congressional Budget Office said on Monday.

Republican lawmakers asked for a study to bolster their opposition to the plan because of their projected costs.

The CBO’s assessment is based on assumptions such as the number of eligible borrowers that will apply and the amount of debts owed to them. The White House had lower estimates coming in close to around $ 240 billion in the next decadeor $ 24 billion a year. CBO’s first-year estimate is lower than the administration’s estimate of $ 21 billion, the White House noted.

The CBO is not taking into account the things Biden believes could offset this cost, such as the Inflation Reduction Act and other measures it has taken to reduce the federal deficit, which rose by nearly $ 7.8 trillion during Donald Trump’s tenure, ProPublica reported. and The Washington Post Office.

The plan presented by Biden in August would forgive $ 10,000 in federal student debt for those earning less than $ 125,000 a year or for households earning less than $ 250,000. Pell Grant recipients would have another $ 10,000 shaved.

According to Forbes calculations, borrowers owe an average of $ 28,950, of which 92% are federal student loans and the rest are private student loans. Total student loan debt is $ 1.75 trillion, including federal and private. As Forbes has noted, student loan debt is moving into middle age and beyond, extending to the retirement group, with 2.4 million borrowers aged 62 and older still owing a total of $ 98 billion.

With News Wire services

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