In another blow to President Joe Biden’s one-time college debt bailout, the Congressional Budget Office has re-scored the plan and found it will cost taxpayers even more than originally projected.
“CBO estimates that the cost of student loans will increase by about an additional $400 billion in present value as a result of the action canceling up to $10,000 of debt issued on or before June 30, 2022, for borrowers with income below specified limits and an additional $10,000 for such borrowers who also received at least one Pell grant,” the agency reported Monday.
The new CBO score is worse even than the $300 billion cost predicted by the University of Pennsylvania Wharton Budget Model.
And according to the nonpartisan Committee for a Responsible Federal Budget (CRFB), the math on debt payoffs is even worse than the CBO’s report.
“Its estimate does not include the cost of the administration’s income-driven repayment (IDR) policy, which could add another $90 to $190 billion in total costs,” the CRFB said Monday.
“CBO’s new estimate confirms the outrageous cost of the White House plan to cancel large amounts of student debt, by executive order, to nearly all borrowers almost regardless of need,” said CRFB president Maya MacGuineas. “And costs could reach $510 to $610 billion with their IDR changes.
“As CBO’s estimates help confirm, the president’s student debt plan would wipe out the 10-year savings from the Inflation Reduction Act twice over, worsen inflationary pressures, and deliver benefits to millions of Americans with advanced degrees in upper-income households,” MacGuineas added.
Despite the hike in costs, Sen. Maggie Hassan is still supporting Biden’s plan.
“While I do not support canceling all student debt–believing instead that we need to focus on targeted relief and bringing down the cost of higher education—the administration’s announcement is a balanced compromise approach that will help those who need it the most,” Hassan said when Biden first announced his proposal. Asked by NHJournal about the CBO report and whether it changed her view of the plan, Hassan declined to comment.
The Bolduc campaign, however, had plenty to say.
“Senator Hassan is no stranger to spending taxpayers’ money, but the exceedingly expensive college loan bailout takes the cake,” said campaign spokesperson Kate Constantini. “It is the antithesis of fiscal responsibility or Granite State values to force taxpayers to fund the college degrees of their neighbors.
“For nearly six long years, Senator Hassan has enjoyed spending your hard-earned money, a spending spree that is coming to an end in November.”
Unlike his fellow Granite State Democrat, Rep. Chris Pappas has denounced the college debt bailout.
“This announcement by President Biden is no way to make policy and sidesteps Congress and our oversight and fiscal responsibilities,” Pappas said last month. “Any plan to address student debt should go through the legislative process, and it should be more targeted and paid for so it doesn’t add to the deficit.