Peach Tree Times

Phillip Swagel, director of the Congressional Budget Office, recently wrote a letter to the ranking Republicans on the House and Senate education committees in response to their request for a cost estimate for President Biden’s unilateral student-loan forgiveness plan.

Coined by the Wall Street Journal Editorial Board writers as the CBO's "horrifying political math," the current cost estimate sums up to $420 billion. This includes $20 billion from Biden's unilateral 3-month extension of the moratorium on student loan payments and another $400 billion that will be needed to cover his cancellation of up to $10,000 in debt issued by June 30 this year, as well as the $10,000 for Pell grant recipients.

"This is an unprecedented act of peacetime fiscal recklessness," the Wall Street Journal Editorial Board wrote. 

Democratic U.S. Sen. Raphael Warnock of Georgia, who's up for re-election in November, supports Biden's debt-forgiveness plan and advocates for even more forgiveness than what's in the current plan.

"In GA, the average student loan debt is over $40K—creating financial burdens that weigh down millions of families. I’m proud to join my colleagues in calling on @POTUS to cancel up to $50K in student debt for borrowers, helping push our country toward economic & racial justice," the senator said on Twitter last year.

According to the most recent Senate Opportunity Fund poll results, 60% of Americans 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 place September 12-15, 2022, and surveyed 1600 general election voters nationally.

The CBO's cost estimate doesn't include the president's steps to ease the terms on federal income-based repayment plans that are in addition to the $10,000-$20,000 in loan forgiveness. According to the WSJ Editorial Board, "independent analysts have estimated that cost at $150 billion or more, which would take the cost to $570 billion."

Biden’s plan, announced Aug. 24, states that for borrowers making less than $125,000 a year, he will cancel $10,000 of federal student loan debt. For borrowers who attended college on Pell Grants, awarded to students with exceptional financial need, Biden's forgiveness extends up to $20,000 in student loan debt. In addition, Biden has extended pandemic-era payment freezes through the end of this December.

According to Fortune.com, Biden has canceled more student loan debt than any other president, having deployed nearly $20 billion in forgiveness since taking office in January 2021. That’s still only slightly more than 1% of all federal student loan debt, which currently stands at $1.7 trillion among 45 million borrowers.