Biden Loan Cancellation Could Cost More Than $1,000,000,000,000, Says Penn Wharton Budget Model

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August 26, 2022

President Joe Biden's plan to have taxpayers pay for student loans could cost more than $1 trillion, according to the Penn Wharton Budget Model.

Debt cancellation alone will cost up to $519 billion, the model found, with loan forbearance costing another $16 billion. In light of behavioral changes and program details, though, the total sum could be over $1 trillion.

The estimate is even more than the National Taxpayers Union Foundation, which analyzed the budget model, expected. The foundation found that debt cancellation will cost the average individual taxpayer over $2,000, the Washington Free Beacon reported.

Both Republicans and Democrats have blasted the plan, with Army colonel and congressman Mike Waltz (R., Fla.) calling the cancellation "a slap in the face to veterans." Biden used a law intended to help veterans to justify canceling loans for all borrowers. Swing-district congressman Jared Golden (D., Maine), meanwhile, said the plan is "out of step with the needs and values of working-class Americans."

Experts, including liberal economists, say the plan will worsen inflation, with former Obama administration adviser Jason Furman calling the move "gasoline on the inflationary fire that is already burning."