Grand Canyon Times

The Congressional Budget Office (CBO), a nonpartisan group, has estimated that federal government will spend $420 billion on the student loan forgiveness plan authorized by President Joe Biden and supported by U.S. Sen. Mark Kelly (D-AZ).

Phillip Swagel, director of the Congressional Budget Office, wrote a letter to the ranking Republicans on both the House and Senate education committees in response to their request for a cost estimate.

"This is an unprecedented act of peacetime fiscal recklessness," The Wall Street Journal editorial board wrote on Sept. 26. 

The CBO's "horrifying political math" adds up to $420 billion, which includes $20 billion from Biden's three-month extension of the moratorium on student loan payments, and another $400 billion to cover his cancellation of up to $10,000 in debt for each borrower, and additional $10,000 for Pell grant recipients.

Kelly, a Democrat who is up for reelection in November, was a strong supporter of the loan forgiveness plan. 

"The reality is, college costs too much, and the federal government should not be profiting off of young graduates," Kelly told Axios Phoenix. Kelly added that he was glad the plan is more "targeted" than other proposals that would cancel student loan debt.

According to a poll taken Sept. 12 to 15 by the Senate Opportunity Fund, 60% of Americans would agree with the statement, "President Biden used student loan debt cancellations to buy votes from young voters just before the midterm elections in November. It was a political decision.” The poll took surveyed 1,600 general election voters.

The CBO's cost estimate did not include Biden's steps to ease terms of federal income-based repayment plans on top of loan forgiveness.

According to WSJ, "Independent analysts have estimated that cost at $150 billion or more, which would take the cost to $570 billion."

Biden announced Aug. 24 that he would cancel $10,000 of federal student loan debt for borrowers making less than $125,000 a year. For those who attended college on Pell Grants, Biden's plan will forgive up to $20,000, according to Fox News. In addition, Biden also extended pandemic-era payment freezes through the end of the year.

According to Fortune, Biden has canceled more student loan debt than any president, having handed down nearly $20 billion in forgiveness since taking office. However, that is still just slightly more than 1% of all student loan debt, which stands at $1.7 trillion among 45 million borrowers.