CBO: White House plan to relieve student loan debt costs $400 billion

[brooklynite]

Source: Washington Post

The White House’s plan to cancel student loan debt for tens of millions of American borrowers will cost roughly $400 billion, according to a new estimate released by Congress’ nonpartisan scorekeeper.

The scorekeeper also found that the White House’s plan to temporarily extend an existing pause on student loan payments would cost roughly $20 billion.

The new estimate will new fuel to the debate over President Biden’s student debt decision, which was cheered by advocates but immediately assailed by Republican lawmakers as a wasteful and inefficient use of government money. Biden announced in August that his administration would cancel up to $20,000 in student debt for lower- and middle-class borrowers.

Supporters of student debt cancellation have argued that similar estimates in the past have overstated the policy’s cost to the federal government, because despite formally owing the federal government money many borrowers never pay back the loans.

Read more: https://www.washingtonpost.com/us-policy/2022/09/26/cbo-student-loan-forgiveness-biden/

[captain queeg]

1. Damn, that's almost as much as the tax cuts for the rich

Not really, especially the tax cuts for the rich are ongoing.

[live love laugh]

2. White House plan to relieve billionaires was $1 trillion.

[Magoo48]

3. Good on you, Mr. President.

The consequences will be positive and so encourage the next round.

[Chainfire]

4. That is not "what it cost" but may be what it will return to the economy.

The people relieved of their student debt will spend that money on goods and services instead of padding bank stashes.

[aocommunalpunch]

5. Republicans look in mirror

And dare call this wasteful and inefficient? Lmao

[cstanleytech]

6. Personally I believe that rather than wipe the debt people should be required to

send the monies to an investment agency that is approved of and has oversight from the federal government.
In the long term that could benefit alot of people especially as they get older.

[Hugh_Lebowski]

7. I wonder how much taxpayers SAVED over the last 30 years or so as they shifted more and more burden

onto the students and their families by constantly reducing how much government was contributing to higher education?

That mostly used to be done thru State coffers, but the States have slowly but surely taken themselves 'off the hook' for these subsidies. Leaving the eventual onus on the Federal Government for this kind of relief.

I'd bet the citizens of each state have collectively SAVED way more than $400B over what would have been spent pursuant to the standards of, say, 1990, had those continued.

My quarterly tuition circa that time, for a good in-state university ... was $290-$335 over the course of my time there. It's now like 7X that at the same school, in large part because the State doesn't subsidize nearly as much anymore.

This whole program is, simply put, the chickens coming home to roost. It 'costs' $400B because ... taxpayers already saved $400B, and probably way the fuck more.

And in most of the rest of the civilized world, of course ... higher education is free (to the student I mean), or a small fraction of what we pay in the USA.

[former9thward]

11. State aid is not the only factor.

Take at look at your school's bureaucracy in 1990 vs. what it is today. Schools have added asst to the asst to the asst Deans. They have increased the number of departments (not the teaching but administrative). All of this costs a fortune. Also most schools have turned their campuses into near palaces. Look at a picture of your school in 1990 and look at it now. I live very near (and went to) the largest university in the country. Students there live in university dorms which are better than any apartment I ever lived in after I graduated and before I got a house. All of this costs money. Is it needed? No.

Schools did all of this because they knew they could raise tuition to pay for it because student loans had no effective cap and students were as ignorant as their parents about how much loans cost and how much they take away from the income you need to live. If there is no accountability by colleges then the whole student loan mess will just keep coming around.

[MichMan]

14. Colleges gouged students by raising tuition costs so high

They are laughing to the bank right now and figuring they now have a green light to charge even more.

[Tom Yossarian Joad]

8. This is being trumpeted by many RW leaning newsbrokers.

They don't message many or any of the positivity involved in the possible outcomes of these efforts to lighten the burden of so many that were harmed by these predatory loans.

[moose65]

9. Is this over 10 years?

If so, why is that almost NEVER mentioned? 400 billion over 10 years is 40 billion per year. The defense budget is ALWAYS stated as an annual expenditure - never over 10 years. Wonder why that is??

[Lonestarblue]

10. I think the fossil fuel companies still get direct taxpayer subsidies in the billions of dollars

every single year—yep, those same companies that raised gas prices so they could have unprecedented profits.

Now which is better for the economy—subsidies that in effect just pad executive bonuses or canceling student loans that in turn allows people to spend money by buying products that help GDP? Obviously, a rhetorical question.

“The US government has subsidized coal, oil, and gas for decades, despite the fact that a majority of voters want to end fossil fuel subsidies. Currently, experts estimate that direct subsidies to the fossil fuel industry total around $20 billion every year, $15 billion of that from the federal government. Indirect subsidies — policies that aren’t targeted at fossil fuel corporations specifically but still benefit them — total a whopping $649 billion per year in the US alone.”

https://www.greenpeace.org/usa/fighting-climate-chaos/everything-you-need-to-know-about-fossil-fuel-subsidies/

[McKim]

12. Just Wonderful!!!

This is just wonderful!!!! Imagine spending big bucks on our own people!!!!! So happy for this great use of my tax dollars!!!!

[Dyedinthewoolliberal]

13. Can't get past the paywall but

I sure would like to see how they came up with that number.....

[MichMan]

15. I think it will end up being significantly higher than that

The amount students will have to pay on future loans is capped as a percentage of discretionary income REGARDLESS of HOW MUCH THEY BORROW.

That means you have the same amount to pay back whether you borrow the max or something less, so there is zero incentive for students not to borrow the maximum amounts available. Anyone trying to cut costs or pay by using savings would be a fool under these conditions.

Colleges know this, so they know have a green light to jack up costs even higher than they already are with taxpayers paying most of the bill.

[azureblue]

16. not exactly

This is called selective accounting - Exactly how much Principle wold be lost? Not interest. The actual amount loaned? some student loans have Freddie the loan shark interest rates, enabled by the GOP. Who also excepted student loans from bankruptcy