President Joe Biden’s latest extension to the pause on federal student loan payments will cost an additional $40 billion, according to a federal budget watchdog group.
The president announced last week that the pause on federal student loan payments would continue until at least the end of June after federal courts blocked the administration’s attempts to wipe out up to $20,000 in federally held student loans per borrower.
BIDEN EXTENDS STUDENT LOAN PAYMENT PAUSE TO JUNE 30 AS COURTS TIE UP FORGIVENESS PLAN
In a video announcement last week, the president said it would be unfair to require borrowers to make payments on their loans while the plan to cancel a significant amount of their loans remains tied up in court.
“I’m confident that our student debt relief plan is legal,” the president said in the announcement.
The Committee for a Responsible Federal Budget said the delay in the resumption of payments until 60 days after June 30, 2023, would carry a $40 billion price tag and would bring the overall cost of the pause in payments dating back to March 2020 to $195 billion.
“Whether or not the courts allow the Administration to unilaterally cancel $10,000 to $20,000 per person of student debt should have no bearing on whether we should collect the debt that is currently owed,” the committee’s president, Maya MacGuineas, said, according to Just the News. “Why are we continuing to cancel billions of dollars of interest for wealthy doctors and lawyers?”
The committee detailed that if the pause were to last through the end of 2024, the bill would be around $275 billion, which they noted would be about 70% of the cost of the administration’s student loan cancellation plan.
The Congressional Budget Office estimated earlier this year that the loan forgiveness program will cost $400 billion over the next 10 years.