Biden student loan forgiveness plan to cost $240 billion

Canceling student loan debt for millions of borrowers would cost the federal government $240 billion over the next decade after it declined to provide cost estimates earlier in the week.

But other outside analysts said the price was too high.

The Biden administration projects the move to cancel up to $20,000 in student loan debt for Pell Grant recipients, and $10,000 for other borrowers,

Will reduce loan repayments collected by the government by an average of $24 billion annually for 10 years, said Bharat Ramamurti, deputy director of the National Economic Council.

Ramamurti said the $24 billion annually represents just 1.5% of the projected $1.7 trillion deficit reduction the administration is projecting for the current fiscal year.

Ramamurthy said, “For this year we have already been paid for the amount of deficit reduction.”

“We are using a part of it – a very small part of it – to provide relief to the middle-class family.”