President Joe Biden's most recent student loan program will cost taxpayers $475 billion over the following ten years, per a respected government budget model.
President Biden's new Income-Driven Repayment Plan is expected to cost close to half a trillion dollars, according to the Penn Wharton budget model, which was released on Monday evening. Amounts owed on the $1.64 trillion in loans already outstanding in 2023 will be reduced by around $200 billion, which will be part of the cost. We anticipate that during the following ten years, approximately $1.03 trillion in new loans will be extended, adding another $275 billion in expenditures as a result of reduced payments.
The cost of Biden's student loan program is projected to be as high as $558 billion. The lowest projection is $339 billion.
The program's announcement by the Biden administration stated that 804,000 Individuals will have $39 billion “forgiven” to them. The expenses of the loans are actually being passed down to taxpayers rather than being forgiven, as shown by the Penn Wharton numbers.
About 53% of the present loan volume, according to the model's creators, should transfer to the new program once it becomes operational in July 2024.