President Biden’s plan for student debt cancellation will cost the federal government about $400 billion over the next 30 years, according to new estimates from the Congressional Budget Office. The figures were released Monday in response to a request from Republican lawmakers who oppose Biden’s plan in large part because of its costs, the AP reports. They were quick to cite the estimates as evidence that the plan will “bury” taxpayers, passing along the costs to huge numbers of Americans who never went to college. The Biden administration previously estimated the plan would cost about $24 billion a year over the next 10 years—about $240 billion for the decade—while other estimates put the total cost at $500 billion or more over the decade.
On Monday, the White House noted that the CBO's estimated cost in the first year—$21 billion—is actually lower than the administration's early estimate of $24 billion. To reach the CBO's $400 billion figure, officials looked at the immediate cost of cancellation along with the longer-term impact, including lower monthly repayments. The office separately estimated that Biden’s latest extension of a student loan pause will cost an additional $20 billion. Monthly payments on federal student loans have been frozen since the first weeks of the pandemic. Biden in August continued the pause through the end of the year, calling that the final extension.
Biden has played down the cost of the cancellation plan, saying it would be offset by other measures to reduce the federal deficit, including his landmark Inflation Reduction Act. On Monday, the White House defended the plan, saying it will provide relief to struggling borrowers, allowing them to start businesses, buy homes, or just pay their bills. “It’s a stark contrast to the Trump tax bill, which ballooned the deficit by nearly $2 trillion and provided the vast majority of benefits to big corporations and the wealthiest individuals,” White House spokesman Abdullah Hasan said. The administration is expected to release its own detailed cost estimates in coming weeks. (Much more, including reaction from both sides of the aisle, here.)