White House analysis finds Biden plan to cancel some student loan debt costs $379 billion
By Phil Mattingly, CNN
President Joe Biden‘s order to cancel student loan debt for millions of Americans will cost an average of $30 billion per year over the next decade and $379 billion over the course of the program, according to a Biden administration cost estimate.
The administration analysis of the overall cost roughly lined up with a Congressional Budget Office economic analysis released this week that put the cost of the program at roughly $400 billion. Differences were driven primarily by differences in economic forecasts and the estimated number of borrowers who would utilize the program.
The CBO analysis sparked an intense new round in the weeks-long battle between the White House and congressional Republicans over the size of the action — and the way it is scored. The White House estimate of the cost of the program over 10 years would be $305 billion.
White House officials have steadfastly defended the merits of the proposal, which is structured in a way that would direct nearly 90% of the debt relief to individuals earning less than $75,000 per year.
“Every dollar that we are going to record as a cost to the federal government is actually a benefit to a low- and moderate-income families,” a senior administration official said. “We talk about costs to the federal government, but what they actually are is the fact that millions of people will be able have a little more breathing room in their lives every year.”
The cost estimates, conducted over the course of the last several weeks by the Office of Management and Budget and the Department of Education, mark the most fulsome administration analysis into Biden’s decision last month to take the action that could provide student loan relief for as many as 40 million borrowers.
But they also come as the White House moves to fend off sharp Republican criticism — and a handful of Democratic objections — to the overall cost of the program and lawsuits seeking to overturn it altogether.
The administration’s cost estimate of an average of $30 billion per year over the next decade is part of an analysis of the reduction in cash flows into the government, which administration officials have pushed as a more accurate way to estimate the near-term effect of the overall cost to the government by the action.
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