CBO Puts a $400 Billion Price Tag on Biden’s College Student Loan Forgiveness Program
Posted on 09/27/2022
The Congressional Budget Office (CBO) is a federal agency within the legislative branch of the United States government that provides budget and economic information to Congress. The CBO estimates in a new report that U.S. President Joe Biden’s plan to cancel up to US$ 20,000 in federal student loan debt for low-income and middle-income borrowers would cost U.S. taxpayers US$ 400 billion. President Biden announced the forgiveness plan in August 2022 before the U.S. mid-term elections. The CBO estimate relies on a number of assumptions, including how many eligible borrowers will apply, as well as what portion of the outstanding federal student loan debt may not have been repaid anyway over the lifetime of the loans due to other existing forgiveness programs. Under Biden’s plan, individual borrowers who earned less than US$ 125,000 in either 2020 or 2021 and married couples or heads of households who made less than US$ 250,000 annually in those years will see up to US$ 10,000 of their federal student loan debt forgiven.
The U.S. Department of Education plans to release an application for the program in October 2022. No student debt has been canceled yet.