Biden's student debt relief plan could cost the government $400 billion

US President Joe Biden and Education Secretary Miguel Cardona (R)

(Image credit: OLIVIER DOULIERY / Contributor/Getty Images)

published 26 September 2022

The Biden administration's plan to cancel student loan debt for millions of Americans will cost the government about $400 billion, per a new estimate by the nonpartisan Congressional Budget Office. The letter, addressed to Congress members, also revealed that the White House's plan to extend the current pause on student loan payments temporarily will cost around $20 billion.

The new estimates threaten to give Republican opponents of President Biden's student debt plans ammo for their claims that his decision is an inefficient use of government money. Biden first announced plans to cancel up to $20,000 in student loan debt for lower and middle-class borrowers in August, including $10,000 specifically for recipients of Pell Grants. The Washington Post reports that an estimated 60 percent of borrowers will benefit from the $20,000 reduction, per White House officials.

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Theara Coleman has worked as a staff writer at The Week since September 2022. She frequently writes about technology, education, literature and general news. She was previously a contributing writer and assistant editor at Honeysuckle Magazine, where she covered racial politics and cannabis industry news.

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