A $400 billion strategy to reduce student loan debt in the US: The Congressional Budget Office on Monday calculated that US President Joe Biden‘s proposal to cancel some of the nation’s staggering student loan load would cost the government $400 billion.
The assessment, sought by conservative legislators and released by an impartial government agency, anticipate to intensify the already raging debate between Democrats and Republicans over the subject.
As a consequence of the debt forgiveness, “CBO projects that the cost of student loans will rise by about $400 billion in present value,” the report said.
However, a White House source pointed out, “The CBO referred to its own assessment as “very doubtful.” We concur.”
Republicans accuse Biden of squandering money on the proposal, claiming that taxpayer dollars may utilize more wisely.
On August 24, Biden made the announcement, fulfilling a campaign pledge.
All debts due by borrowers earning less than $125,000 in annual income would have $10,000 subtracted from them as part of the relief package. In addition, the compensation will amount to $20,000 for past students who attended college using need-based federal aid, known as Pell Grants.
The average cost of a college education in the US is between $10,000 and $70,000 a year, leaving graduates with crippling debt when they start their careers.
According to official statistics, the typical US student graduates with a $25,000 debt. Many students take years or even decades to repay this loan.
Biden‘s proposal still hotly contested. The scheme’s cost is a hotly contested technical issue among economists and academics. Especially given the ambiguity surrounding loan repayments that those who benefit from the debt forgiveness have already paid.