President Joe Biden's executive order granting up to $20,000 in student loan debt relief will cost the US federal government $400 billion, the Congressional Budget Office (CBO) said on Monday
WASHINGTON (Pakistan Point News / Sputnik - 26th September, 2022) President Joe Biden's executive order granting up to $20,000 in student loan debt relief will cost the US Federal government $400 billion, the Congressional Budget Office (CBO) said on Monday.
"CBO estimates that the cost of outstanding student loans to the federal government will increase by about $400 billion because of an executive action canceling some debt," the agency said in a report.
The report said the cost of outstanding student loans will increase by $20 billion as a result of suspended payments, interest accrual and involuntary collections from September 2022 to December 2022.
The White House announced last month that student loan payments will resume next year and at least $10,000 of student loan debt will be canceled for each eligible borrower. An additional $10,000 of debt will be canceled for eligible borrowers who also received a federal Pell grant.
In March 2020, the US Department of education granted forbearance to holders of federal student loans amid the onset of the COVID-19 pandemic, with an estimated 60% of all borrowers taking advantage of the program.
