Biden’s Student Debt Forgiveness Plan Will Cost $400 Billion, CBO Finds

The Congressional Budget Office estimates that President Joe Biden's plan to forgive student loan debt for many borrowers will cost $400 billion.

Biden's decision to pause student loan payments through the end of the year will cost $20 billion, according to the CBO.

One month ago, Biden offered to forgive all federal student loan borrowers who earn less than $125,000.

The CBO estimated that 85% of student loan borrowers will be able to have their loans forgiven, 85% of eligible borrowers will apply for debt cancellation, and 45% of eligible borrowers will see their entire balance wiped away.

The $400 billion figure is in line with an August estimate by the National Taxpayers Union, which said Biden's forgiveness program would cost around $2,500 per taxpayer on average.

The program costs almost half as much as the federal government spends on military spending this year.

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Biden promised during the 2020 election that he would forgive his debts. The plan was praised by many Democrats, but it has faced criticism from the right about its cost and the potential impact it could have on already high inflation, as well as from the left, which believes it does not do enough to help former and future students. The White House said last month that student debt makes it hard for borrowers to build wealth. The pause on loan repayments was extended by Biden last month and will resume in January. The administration had already forgiven $32 billion in student debt.

Big Number

More than $1 trillion. According to the CBO, 43 million borrowers have federal student loan debt.

Chief Critic

Republicans and business-owners criticized the cost. The Republicans on the House Education and Labor Committee called it a "boondoggle" that is "burying taxpayers alive".

Here's who benefits most and least from Biden's student loan forgiveness plan.

Here are all the other details of Biden's student loan forgiveness plan.

The White House plans to relieve student loan debt.