Economists revised the economic price tag associated with Joe Biden’s plan to cancel student debt this week, saying the proposal would cost taxpayers more than $361 billion over the next decade.
From Fox News:
A key part of President Biden’s student loan debt plan that would cut the monthly bill for certain borrowers could cost up to $361 billion over the next decade, according to new findings from the Penn Wharton Budget Model.
The proposed rule from the Education Department would overhaul one of the income-driven repayment plans – known as REPAYE – by further reducing borrowers’ payments to a certain percentage of their discretionary income.
“We cannot return to the same broken system we had before the pandemic, when a million borrowers defaulted on their loans a year and snowballing interest left millions owing more than they initially borrowed,” Education Secretary Miguel Cardona said in a statement.
The plan would reduce monthly obligations for undergraduate borrowers by as much as half, according to the White House; a typical graduate from a four-year university could save as much as $2,000 annually under the plan.