The Congressional Budget Office on Monday calculated that US President Joe Biden’s proposal to cancel some of the nation’s staggering student debt burden would cost the government $400 billion.
The assessment, which was requested by conservative lawmakers and released by an impartial federal agency, is anticipated to intensify the already raging debate between Democrats and Republicans over the subject.
As a result of the debt forgiveness, “CBO projects that the cost of student loans will increase by approximately an additional $400 billion in present value,” the report stated.
Republicans charge Biden of squandering money on the proposal, claiming that taxpayer dollars could be utilized more wisely.
On August 24, Biden made the announcement, fulfilling a campaign pledge.
All loans due by borrowers making less than $125,000 in annual income would have $10,000 subtracted from them as part of the relief package. The compensation will amount to $20,000 for past students who attended college using need-based federal aid known as Pell grants.
The average cost of a college education in the US is between $10,000 and $70,000 a year, leaving graduates with crippling debt when they start their careers. The average student in the US graduates with a debt of $25,000, according to government statistics. Many students take years or even decades to repay this loan.
Biden’s proposal is still being hotly contested. The cost of the scheme is a hotly contested technical issue among economists and academics, especially given the ambiguity surrounding loan repayments that those who benefit from the debt forgiveness have already made.
