Someone’s got to pay — even if borrowers don’t have to pay their student loans back.
Those payers end up being the taxpayers who will foot the bill left by President Joe Biden’ student debt handout, according to a report from the Committee for a Responsible Federal Budget (CRFB).
The price tag could run between $870 billion and $1.4 trillion if the student debt handout, as well as other Biden policies, are put into effect.
“That’s more than all federal spending on higher education over the nation’s entire history,” the CRFB report said. It added most of student loan debt cancellation was enacted through executive actions by the Biden administration.
The breakdown of costs includes $620 billion in debt cancellation already enacted. Part of that amount is the $275 billion from Biden’s repayment program known as SAVE and $195 billion that stem from interest cancellations for 41 months when repayments were stalled in March 2020 at the start of the COVID-19 pandemic, per the report.
More cost comes from the $150 billion from student debt for those who went to schools that closed.
The latest plan tacks on an additional $250 billion to $750 billion, according to CRFB’s estimates.
“President Biden from Day One has worked to fix the student loan system and make sure higher education is a ticket to the middle class – not a barrier to opportunity – because he knows that debt cancellation not only benefits borrowers, it benefits the entire economy,” the White House said when it announced the latest plan, per Fox News.
The burden to fund these policies is the largest undertaking to date to pay for higher education.
The $870 billion to $1.4 trillion total cost range is more than all federal spending on higher education prior to the pandemic — that was $744 billion from 1962 to 2019, according to CRFB.
“As we’ve explained before, most of these student debt cancellation policies have not only been costly, but also inflationary, poorly targeted, counter to the mission of lowering college costs, and not financially justified,” according to the CRFB.
“Instead of continuing down this road, lawmakers should work together on reforms that actually fix the student loan program and address the cost and quality of higher education,” the committee said.
