The gargantuan price tag for President Joe Biden’s student loan forgiveness plan is garnering renewed scrutiny as the Supreme Court prepares to hear oral arguments on the constitutionality of the policy Tuesday.
In August, Biden announced a plan to eliminate $10,000 in student loan debt to borrowers who make less than $125,000 a year and $20,000 in loan forgiveness to Pell Grant recipients.
WHO ARE THE ATTORNEYS FIGHTING BIDEN’S COSTLY STUDENT LOAN RELIEF AT THE SUPREME COURT?
The policy, which has been blocked by federal courts prior to the Supreme Court’s review, would cost $400 billion over the next decade, according to the Congressional Budget Office, which said it was “highly uncertain” about the estimate. Meanwhile, a study from the University of Pennsylvania’s Wharton School of Business said the cost could easily exceed $500 billion.
In January, Biden’s Department of Education unveiled new proposed regulations that substantially overhauled the department’s income-driven repayment program, which allows low-income borrowers to make lower monthly payments than their loan would otherwise provide. The Penn-Wharton model estimated that the total cost of the proposed changes to the income-driven repayment program, coupled with the widespread forgiveness plan, could push the cost beyond $1 trillion.
The plan, despite its eye-popping price tag, has drawn praise from members of the president’s party, who blasted Republicans for attempting to block the policy.
“Extreme MAGA Republicans are working overtime to stop us from helping those with student loan debt,” House Minority Leader Hakeem Jeffries (D-NY) tweeted Monday. “Thank you President Biden for your strong and continued commitment to delivering life-changing relief to millions of Americans.”
Extreme MAGA Republicans are working overtime to stop us from helping those with student loan debt.
Thank you President Biden for your strong and continued commitment to delivering life-changing relief to millions of Americans.
— Hakeem Jeffries (@RepJeffries) February 27, 2023
In contrast, Republican politicians have blasted the policy as an unfair redistribution of wealth from educated elites to noncollege-educated workers and raised alarms about the policy’s cost to the taxpayer.
Sen. Bill Cassidy (R-LA) noted in a statement to the Washington Examiner the plan’s accompanying price tag and added that the administration’s continued extension of a pause on collecting payments had cost “taxpayers $195 billion.”
“This policy before the Supreme Court does not forgive debt. It only transfers it from those who willingly took it on to taxpayers who chose not to go to college or worked hard and made sacrifices to pay off their loans,” said Cassidy, the top Republican on the Senate Health, Education, Labor, and Pensions Committee.
“Where is the forgiveness for the guy who didn’t go to college but is working to pay off the loan on his work truck? What about the woman who was responsible and prioritized paying off her student loans? Instead, the Biden administration is planning on having them pick up the bill,” he said.
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House Education and Workforce Committee Chairwoman Virginia Foxx (R-NC) told the Washington Examiner that she was optimistic that the court would strike down the administration’s policy and called on the president to work with Congress to reform the federal student loan program.
“I am optimistic the Supreme Court will see President Biden’s student loan bailout for what it is: blatantly illegal and a reprehensible case of executive overreach,” she said. “This administration likes to sell its plan as debt forgiveness, but hardworking Americans who did not go to college or paid off their own loans know they will be forced to foot the bill for Biden’s illegal scam. If President Biden was serious about real student loan reform, his administration would be working with Congress to create long-term solutions, not sidestepping the elected representatives of the American people.”
