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White House says student loan forgiveness plan will cost $24 billion a year

Published 08/25/2022, 10:59 PM
Updated 08/26/2022, 05:10 PM
© Reuters. FILE PHOTO: Empty boxes are taken out during move in day as Bennett College students return to campus for the first time since the HBCU Liberal Arts College went remote to prevent the spread of the coronavirus disease (COVID-19) in March 2020, in Greensbo

By Costas Pitas

(Reuters) - A U.S. plan announced this week to forgive $10,000 in student loans for millions of debt-saddled former college students will cost roughly $24 billion a year assuming that three quarters of those eligible take up the offer, the White House said.

The move, announced by President Joe Biden on Wednesday, kept a pledge he made in the 2020 campaign for the White House and could boost support for his fellow Democrats in the November congressional elections.

Some economists said it may fuel inflation and Republicans mostly oppose student loan forgiveness, calling it unfair because it will disproportionately help people earning higher incomes.

On Wednesday, the White House said it had yet to determine the price tag for the package but on Thursday, White House spokesperson Karine Jean-Pierre told CNN:

"Assuming that 75% of folks take us on on the President's student loan cancellation plan, and you look at the average cash flow on that, it's going to be about $24 billion per year."

American university tuition fees are substantially higher than in most other rich countries, and U.S. consumers carry $1.75 trillion in student loan debt, most of it held by the federal government.

Latest comments

"Republicans mostly oppose student loan forgiveness, calling it unfair because it will disproportionately help people earning higher incomes."  -- so tax cut that disproportionately help people earning higher incomes is OK, but loan forgiveness somehow is not?  explain that one to me
just because you have a political sci degree isn't my problem. I paid for my college.
Buying votes with taxpayer's money. I believe that's illegal.
did you complain about vote buying when The Donald insisted to put his name on every Covid relief checks sent out by IRS?
He was the president.
 presidents don't put their names on IRS refund checks, that's not until The Donald decided to take credit for the bipartisan Covid relief bills and put his name on all the checks......oh, and despite what you hear from Q websites, Biden is the president now
The karens rage but say nothing about Republicans on the PPP teat. Maybe clean your own house first?
ahh sure totally same thing, gov forcing you to shut down your business and then creating the problem, only to provide the cure (PPP) loans and having to forgive the mess they created, i totally the same, as a student who voluntarily took out student loans. So he can get an advantage over people who couldnt afford or be able to get higher education.steal from the poor to give to the privileged
$24B per year is a flat-out LIE, unless she means we'll be paying for it for 20 years.
it's a once off, how is it per year for 20 years?
Brandon can pay for it by selling off the rest of the Strategic Petroleum Reserve.
Cuckflakes rage but say nothing about Republicans on the PPP teat
$24 billion? How much is that per vote ?
you haters/losers on this win for the PEOPLE literally are closed minded. this is good motivation for our citizens to go to higher education, thus our society arent full of morons and idiots. this is literally the upgraded time appropriate financial aide thats long overdue; and for as for the tax argument, your tax dollars are also being used for a plethora of other things you probably dont support. you just have no idea
Fox news told me to be angry tho
Just because you can't pay of a 1999 Toyota.
considering how much of my tax money is spent on "defense"/military (world police) I have no problem spending this on education backpay (education for profit)
hahah, 24b/801b (annual "defense" budget) = 2.9%
 now the US military can find enough recruits partly because they pay too little
can't find
Thanks for free education.
Next a stimulus check for everyone that votes and agrees with the agendas of our corrupt President and representatives in Congress.
There are issues with Biden's debt forgiveness program.
What issues?
I feel this is unfair to students and graduates who have and are paying their debt. As an example for intended distribution, a married couple with a combined annual income of 240,000 would each receive the same debt cancellation as a single parent earning less than 100,000. Myself included, no one I know feels like they have enough. I do not though personally know anyone with an annual income of more than $100,000 that actually needs their debts cancelled. I have relatives who could have paid off their student loans and didn't.
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