You won’t hear from the Biden administration how much the student loan bailout will cost. No matter how many times you ask. Initial estimates from the White House were around $240 billion. An estimate from Cato Institute’s Neal McCluskey suggested about $427 billion. But a more recent estimate from the Taxpayers Protection Alliance estimated the cost could reach $1 trillion—with a T. The Daily Mail’s Elizabeth Elkind reports.
Questions continue to mount over the White House’s federal student loan forgiveness plan as multiple analyses suggest the government has underestimated the policy’s hefty price tag.
The most broadly impactful measure is the cancellation of up to $10,000 in student debt for borrowers making under $125,000 or $250,000 married. Pell Grant recipients – generally from low-income backgrounds – are eligible for up to $20,000 in relief.
The Biden administration expects that will mean $240 billion in lost revenue over the next decade.
But even without the cost estimates of the other policy points, several private analyses already suggest the White House’s projection is modest at best.
Among the most highly-cited is the Penn-Wharton budget model, which predicts total costs could reach $1 trillion.
‘It is ludicrous to think that the White House’s student loan forgiveness plan will only cost $240 billion over a decade,’ Taxpayers Protection Alliance President David Williams told DailyMail.com on Monday.
‘When there is an income threshold of $125,000 for individuals and $250,000 for couples, this handout will be available to millions of Americans, many of whom make plenty of money and shouldn’t be asking taxpayers for a handout to help pay off their student loans.’
The debt cancellation portion alone could cost $469 billion to $519 billion, according to Penn-Wharton – roughly double the White House’s figure.
‘It’s easy for the White House to play down the costs of this bailout because there probably won’t be any consequences when that $240 billion balloons into $800 billion or $900 billion,’ Williams told DailyMail.com.
‘With a debt of more than $30 trillion, there is no reason for anybody in the country to take either party seriously when they give cost estimates of legislation or presidential decrees.’
Action Line: The price of free money is not zero. Biden’s bailout will come from the pockets of American taxpayers and savers. A storm of pain is about to crash on Americans looking for relief from inflation. Click here to stick with me, and we’ll weather this storm together.
