The Biden administration's plan to cancel student loan debt for millions of Americans will cost the government about $400 billion, per a new estimate by the nonpartisan Congressional Budget Office. The letter, addressed to Congress members, also revealed that the White House's plan to extend the current pause on student loan payments temporarily will cost around $20 billion.
The new estimates threaten to give Republican opponents of President Biden's student debt plans ammo for their claims that his decision is an inefficient use of government money. Biden first announced plans to cancel up to $20,000 in student loan debt for lower and middle-class borrowers in August, including $10,000 specifically for recipients of Pell Grants. The Washington Post reports that an estimated 60 percent of borrowers will benefit from the $20,000 reduction, per White House officials.
In an interview that preceded the release of the new estimates, Marc Goldwein, senior vice president for policy with the Committee for a Responsible Federal Budget, told the Post, "The president announced possibly the most expensive executive action in history without a score, and we're now seeing just how expensive this policy is going to be."
Around 8 million qualifying borrowers will automatically have their loans forgiven without having to fill out an application, according to the Education Department. All other borrowers who qualify must apply in early October when the agency releases the form.