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Biden’s Student Loan Relief Expected To Cost $400 Billion: As Per The Congressional Budget Office

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IMPORTANT NOTES

  • According to the Congressional Budget Office, President Joe Biden’s student loan cancellation plan will cost $400 billion over 30 years.
  • Last month, Vice President Joe Biden announced a plan to forgive $10,000. Federal student loans for borrowers earning less than $125,000 per year.
  • The CBO is an independent agency that estimates the costs of federal revenue and spending plans for Congress.
  • According to the Congressional Budget Office, President Joe Biden’s student loan cancellation plan will cost $400 billion over 30 years.

Biden announced a plan to forgive debts. Last month $10,000 in federal student loans for borrowers earning less than $125,000 per year, or less than $250,000 if filing jointly. Low-income Pell Grant recipients can receive an additional $10,000 reduction.

In addition to the costs of debt forgiveness. The CBO estimated that Biden’s moratorium on student loan payments from September to December 2022 would cost $20 billion.

The CBO is an independent agency that estimates the costs of federal revenue and spending plans for Congress. Its most recent analysis excludes the cost of adjusting income-driven repayment plans. Biden’s executive order reduced the cap on student loan payments. It is reduced to 5% of a borrower’s income, down from 10%. In line with the Committee for a Responsible Federal Budget, the change will cost an extra $120 billion, a think tank that opposes Biden’s student loan plan.

Check Budget Office Website: https://www.cbo.gov/system/files/2022-09/58494-Student-Loans.pdf

According to the White House, the student loan changes may affect more than 40 million Americans, with half of their student debt forgiven.

The application for loan forgiveness should be available in early October. During Monday’s White House briefing, press secretary Karine Jean-Pierre stated that the administration would provide “very soon” updates on the application process.

Approximately 8 million people, according to the White House, borrowers will receive automatic forgiveness because the Department of Education already has their earnings data.

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