Start United States USA — Financial Student Loan Update: Biden's Cancellation Could Cost $400B

Student Loan Update: Biden's Cancellation Could Cost $400B

99
0
TEILEN

In total, more than 45 million Americans owe a combined $1.7 trillion in federal student debt.
Sweeping amounts of student loan forgiveness proposed by the Biden administration could cost as much as $400 billion, according to a Congressional Budget Office (CBO) estimate released Monday.
On August 24, President Joe Biden announced his plan to wipe out $10,000 in debt for those earning less than $125,000 per year, and $20,000 for those who had received Pell grants—the latter of whom comprise about one-third of U.S. undergraduate students.
Biden has already canceled over $25 billion in loans for 1 million student borrowers, though in total, more than 45 million Americans owe a combined $1.7 trillion in federal student debt. Nearly a third of those borrowers owe less than $10,000.
The CBO’s estimate does not include any effects of actions affecting income-driven repayment plans, any other changes in loan terms, or effects on loans issued after June 30, according to a joint letter to Congress penned by Senator Richard Burr and Representative Virginia Foxx, two North Carolina Republicans who had requested the CBO report.
The CBO also estimated that the cost of outstanding student loans will increase by $20 billion due to suspended payments, interest accrual and involuntary collections from September 2022 to December 2022.

Continue reading...