New analysis shows estimates predicting President Joe Biden's student loan bailout will cost taxpayers $300 billion are grossly underestimated.
According to the University of Pennsylvania Penn Wharton business school, the reallocation of student debt payments from wealthy degree holders to the working class could cost up to $1 trillion.
"President Biden’s new student loan forgiveness plan includes three major components. We estimate that debt cancellation alone will cost up to $519 billion, with about 75% of the benefit accruing to households making $88,000 or less. Loan forbearance will cost another $16 billion. The new income-driven repayment (IDR) program would cost another $70 billion, increasing the total plan cost to $605 billion under strict “static” assumptions. However, depending on future IDR program details to be released and potential behavioral (i.e., “non-static”) changes, total plan costs could exceed $1 trillion," Penn Wharton released Friday morning.
The White House has not conducted an official assessment about how much Biden's bailout will cost but officials continue to insist the move is "fiscally responsible" and won't add to inflation.
Reporter 1: "You could say 'this is how much it's going to cost if everyone who is eligible applies.'"
— Townhall.com (@townhallcom) August 25, 2022
KJP: "We just don't want to get ahead of ourselves."
Reporter 2: "If you don't know how much it's going to cost, how can you guarantee that it's going to be paid for?" pic.twitter.com/MFtIlFXvYl
DOOCY: "How can the country afford such a massive handout?"
— Townhall.com (@townhallcom) August 24, 2022
KJP: "We are doing this responsibly." pic.twitter.com/ZerwLIf44n
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Biden on canceling student debt:
— Townhall.com (@townhallcom) August 24, 2022
"I hear it all the time. How do we pay for it? We pay for it by what we've done." pic.twitter.com/s22OGx6gXY
"How much does this cost?"
— RNC Research (@RNCResearch) August 25, 2022
Education Secretary Cardona: "The projections are still coming out”
"What's the range?"
Cardona: “Those projections are still coming out”
"How will this be paid for?"
Cardona: Biden "has been very clear about reducing the deficit” pic.twitter.com/R4JAIATzcQ
Economic experts, including Democrats, disagree.
Even Obama economist Jason Furman is slamming Biden’s student debt debacle as a “bad idea."
— RNC Research (@RNCResearch) August 26, 2022
“We really don’t need to be adding $500 billion of deficit spending for a purpose that frankly includes wealthy law students and business school graduates.” pic.twitter.com/X7PXw4pYGo
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