According to an analysis from the Committee for a Responsible Federal Budget, President Biden’s debt cancellation plan will cost between “$440 billion and $600 billion over the next ten years,” and Republicans are continuing to warn that the move is not fiscally responsible or fair.
President Biden on Wednesday announced his plan to forgive a portion of student loan debt for those earning less than $125,000 per year.
According to a graphic shared by Biden, under the plan, those making less than $125,000 will see $20,000 forgiveness if they went to college on a Pell Grant, and $10,000 for those who did not receive Pell Grants:
https://twitter.com/POTUS/status/1562462774969581570
While some Democrats say the plan does not go far enough, most are celebrating it as a step in the right direction, while conservatives continue to warn that it is yet another irresponsible and unfair fiscal move at the hands of Democrats.
“Why should a machinist in Ohio pay for the student loans of a jobless philosophy major in Los Angeles?” Rep. Jim Jordan (R-OH) asked on Thursday:
“I joined the Army instead of taking out another loan when I was in medical school. Many Americans make the same decision I did. At a time when every service branch is struggling to meet recruitment goals, Joe Biden’s student loan giveaway will make this problem worse,” Sen. Roger Marshall (R-KS) warned:
Sen. Tom Cotton (R-AR) referred to the plan as nothing more than a “shameless bribe,” while Rep. Lee Zeldin (R-NY) described it as a “slap in the face to people who sacrificed to pay loans, worked through college, went to a less expensive school or skipped college altogether.”
“Magically canceling loans is bad, far left policy & just flat out wrong,” he added:
“Here’s what Pres. Biden’s so-called ‘canceling’ of student debt really means: Americans who already paid off their debt, worked through college, went to a trade school, or chose to not go to school will pay off the loans that other people incurred. On what planet is that fair?” Sen. John Kennedy (R-LA) asked:
According to the Committee for a Responsible Federal Budget, Biden’s plan will cost taxpayers roughly half a trillion dollars:
President Biden today announced a set of changes to student loans – including cancellation of up to $20,000 for some borrowers – that will cost between $440 billion and $600 billion over the next ten years, with a central estimate of roughly $500 billion. Combined with today’s announcement, the federal government’s actions on student loans since the start of the COVID-19 pandemic have cost roughly $800 billion. Of that amount, roughly $750 billion is due to executive action and regulatory changes made by the Biden Administration.
The broad cancellation aspect alone will cost between $330 billion and $390 billion, according to the analysis. However, Biden’s other proposals, such as the changes that would come about via his new income-drive repayment plan, would cost between $90 billion and $190 billion, per the analysis.
Further, Biden’s continued pause on student loan payments, which now extend through the end of the year, will add another $20 billion.
“We estimate that cancellation will eliminate $550 billion of federal student loan debt. However, we project that the overall amount of outstanding federal student loan debt will return to $1.6 trillion (its current level) within five years,” the committee concluded.
Biden bristled on Wednesday after facing questions as to the fairness of his plan, forcing taxpayers to cover the cost of the higher education for others.
“Is it fair to people who in fact do not own multibillion-dollar businesses to see when these guys get all the tax breaks? Is that fair?” Biden said, avoiding the question. “What do you think?”
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Sen. Elizabeth Warren (D-MA) — a champion of canceling student loan debt — had a similar moment while on the campaign trail in 2020, dismissing a father who questioned her sweeping plans to forgive student loan debt.
“I just wanted to ask one question. My daughter is getting out of school. I’ve saved all my money. She doesn’t have any student loans. Am I going to get my money back?” the father asked.
“Of course not,” Warren replied. He pressed:
So you’re going to pay for people who didn’t save any money and those of us who did the right thing get screwed? My buddy had fun, bought a car, and went on all the vacations. I saved my money. He makes more than I did. I worked a double shift.
“You’re laughing at me,” he continued. “Yeah, that’s exactly what you’re doing. We did the right thing and we get screwed.”
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