President Biden’s unilateral decision to cancel up to $20,000 in student loan debt for households earning up to $250,000 will cost American taxpayers $400 billion, according to an analysis today from the Congressional Budget Office (CBO). CBO also found that the President’s decision to extend the moratorium on student loan repayments for another four months will cost American taxpayers an additional $20 billion:
“President Biden’s transfer of student loan debt from the wealthy to the working class is going to cost American taxpayers an outrageous sum of money – $400 billion by CBO’s estimate – while no doubt contributing to an inflation crisis that is already robbing families of their financial security and peace of mind,” said House Budget Committee Republican Leader Jason Smith (MO-08). “The President continues to use COVID as a convenient excuse to advance his welfare for the wealthy agenda while at the same time he tells the American people the pandemic is over. There’s no legal or logical justification for the President’s actions, which came less than a month after the Government Accountability Office found that the federal student loan program created a $311 billion shortfall for the Federal Government. These costs will be borne by hardworking families while Washington Democrats are funneling more taxpayer subsidies to the wealthy to buy and sell luxury electric vehicles and pouring $80 billion into the IRS to go after middle-class taxpayers.”
Key Points from CBO’s Score:
- $400 billion cost to taxpayers from Biden’s decision to cancel student loan debt for families earning up to $250,000.
- $20 billion cost to taxpayers from Biden’s decision to extend the student loan repayment moratorium another four months.
- $105 billion total cost to taxpayers from loan repayment moratorium since Biden took office.
- $4+ billion per month cost to U.S. taxpayers from loan and interest repayment moratorium.
Today’s score by CBO does not include a cost estimate of the changes the Biden Administration also recently made to student loan income-driven repayment plans, which other analyses have projected could cost American taxpayers over $450 billion.
Taxpayers Footing the Bill for Biden’s Loan and Interest Repayment Moratorium:
- 87% of adults without student loans will be forced to pay for the 13% of adults who chose to take on loans.
- 70% of the benefit from canceling student loan debt will go to those in the top half of the income spectrum.
- 56% of all student loan debt is owed by the 14.3% of individuals with advanced degrees.