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Biden Student Debt Plan Cost Exceeds $400 Billion, CBO Says

  • CBO estimates impact on revenue from reduced cash inflows
  • Report requested by Republicans, who are critical of move
A student loan borrower outside the White House on Aug. 25, 2022. 

A student loan borrower outside the White House on Aug. 25, 2022. 

Photographer: Paul Morigi/Getty Images

Updated on

President Joe Biden’s decision to forgive some federal student debt will cost the US Treasury at least $400 billion, the Congressional Budget Office estimated. 

Biden in August announced student debt relief of $10,000 per borrower, subject to income caps of $125,000 per individual and $250,000 per household. An additional $10,000 can be forgiven for Pell Grant recipients. The CBO says that the move will reduce the present value of outstanding loans by $400 billion based on 30 years of reduced future cash inflows.