Biden student loan giveaway costs $400B, budget office finds

The nonpartisan Congressional Budget Office estimated Monday that President Biden’s attempt to forgive between $10,000 and $20,000 in student loan debt for millions of borrowers would cost taxpayers $400 billion — while another estimate indicated the total cost could climb above $600 billion.

Biden last month said he would use emergency powers triggered by the COVID-19 pandemic to set aside $10,000 in federally owned student debt per borrower making under $125,000 per year — or $20,000 per Pell Grant recipient with the same income.

The CBO estimate will provide new impetus to legislators and some state officials who are exploring options to block the initiative on constitutional grounds.

The budget office said in a memo that it “estimates that the cost of student loans [to the government] will increase by about an additional $400 billion in present value as a result of the action canceling up to $10,000 of debt issued on or before June 30, 2022, for borrowers with income below specified limits and an additional $10,000 for such borrowers who also received at least one Pell grant.”