The White House on Friday offered a cost estimate for President Biden’s student loan forgiveness plan, saying it would cost $24 billion annually over 10 years, or $240 billion.
Deputy Director of the White House National Economic Council Bharat Ramamurti told reporters at a White House briefing that the estimate assumed that 75 percent of those eligible for the student loan relief would take advantage of it.
The White House estimate is significantly lower than other outside estimates, and comes after administration officials for days declined to offer a precise figure amid criticisms from Republicans and some Democrats about the potential for the relief plans to exacerbate inflation.
An analysis released by the University of Pennsylvania’s Wharton School of Business estimated that the cost of Biden’s changes to student loans could balloon to $1 trillion over the next decade.
The Committee for a Responsible Budget estimated earlier this week that the plan will cost between $440 billion and $600 billion over the next 10 years.
Ramamurti said Friday that the Education Department and Office of Management and Budget will release an official budgetary score “in the coming weeks.” He also said that the White House still considers the plan “fully paid for” by the reduction in the federal deficit that has occurred under Biden’s watch.
Biden announced on Wednesday that he would forgive up to $10,000 in federal student loan debt for borrowers who make under $125,000 annually and $20,000 for those who received Pell Grants.
Republicans have attacked the debt relief plan, arguing it will ultimately add to the federal deficit and increase inflation. Some Obama-era economists like Jason Furman have also taken issue with the president’s plan.
Ramamurti said Friday that cost of the student loan relief plan would shave 1.5 percent off of the administration’s projected deficit reduction of $1.7 trillion this current year.