The Biden administration previously estimated the plan would cost about $24 billion a year over the next 10 years.
Bharat Ramamurti, deputy director of the National Economic Council, gives details on the timeline for applying for student loan forgiveness during the Aug. 26 White House press briefing.will cost the federal government about $400 billion over the next 30 years, according to new estimates from the Congressional Budget Office.
To reach the CBO’s $400 billion figure, officials looked at the immediate cost of cancellation along with the longer-term impact, including lower monthly repayments that would have been higher if not for the cancellation.will cost an additional $20 billion. Monthly payments on federal student loans have been frozen since the first weeks of the pandemic. Biden in August continued the pause through the end of the year, calling that the final extension.
Biden’s plan promises to cancel $10,000 in federal student debt for borrowers with incomes of less than $125,000 per year or households making less than $250,000. Those who received federal Pell Grants to attend college would get an additional $10,000 erased.An application to receive the benefit is expected by early October. The fate of the plan largely depends on whether it can survive legal challenges that conservatives have promised to bring.
The estimates are based on everything that’s known about Biden’s plan now, but some details have yet to be hashed out. The office said it may revise its estimates as details emerge.
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