President Joe Biden's plans to forgive student debt as several years' worth of costs were compressed into one month contributed to the federal budget deficit being higher on a monthly basis.
The federal budget deficit fell over the course of the year. As more Americans found jobs, it halved in size.
This year's federal budget deficit was more than $1 billion. In the current fiscal year, it is down from the previous year. Biden will talk about the figures on Friday as a sign that he has been responsible for federal finances.
The federal deficit increased in the last month of the fiscal year because of the president's plan to forgive student debt.
Biden in August announced $10,000 in federal student debt cancellation for those with incomes below $125,000 a year. If you received a federal grant to go to college, you can get an additional $10,000 in forgiveness.
20 million people are eligible to have their student debt erased.
Republican lawmakers have criticized the debt forgiveness as financially irresponsible, saying it is a handout to borrowers who attended college. The lawsuits were filed to try to stop the forgiveness. The states plan to appeal the judge's decision to dismiss the suit.
The unemployment rate went from 4.7% to 3.5% over the past year. Tax revenues jumped 21% as a result of the job gains, while spending fell 8% as the government's aid faded.
The Congressional Budget Office predicted in May that the federal deficit would fall in 2023 and begin to rise in the years to come.
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