Home » Economy » Student loan cancellation could cost $900B and favor top earners, analysis shows
Student loan cancellation could cost $900B and favor top earners, analysis shows
Forgiving more student loans is ‘incredibly costly, highly disappointing’: Economy expert
Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, says Biden’s promises of caring about a fiscal future ‘fall flat.’
Forgiving student loan debt could cost upward of $900 billion and disproportionately benefit wealthy Americans, according to a new analysis published on Tuesday.
The findings from the Penn Wharton Budget Model, a nonpartisan group at the University of Pennsylvania's Wharton School, come as President Biden reportedly prepares to make a long-awaited announcement on his proposal for dealing with student loan debt.
Penn Wharton estimated that a one-time forgiveness of $10,000 per borrower would cost about $300 billion if the policy is limited to individuals with incomes less than $125,000. The cost jumps to $330 billion if the program continues over the next decade and would cost $344 billion if the White House scrapped the income limits. Should Biden opt to wipe out $50,000 per borrower, it would cost the federal government roughly $980 billion, according to the analysis.
Between 69% and 73% of any debt forgiven would accrue to households that are in the top 60% of income distribution in the U.S.
LARRY SUMMERS WARNS STUDENT LOAN DEBT RELIEF COULD WORSEN INFLATION