The nonpartisan Congressional Budget Office estimated that the Biden administration’s plan to cancel student debt for tens of millions will cost about $400 billion, The Washington Post reports.
Biden announced last week that his administration would cancel up to $10,000 in student debt for eligible borrowers and up to $20,000 for Pell Grant recipients, as well as changes to existing repayment plans.
The plan is expected to aid more than 40 million Americans.
About half of borrowers are expected to get the full $20,000 in debt relief, according to administration estimates.
About half of borrowers could have their debt entirely wiped out.
The CBO estimated that the plan would cost about $400 billion.
The administration's plan to temporarily extend a pause on student loan payments is expected to add another $20 billion in costs.
The CBO did not estimate how much the administration’s plan to lower the amount borrowers can be forced to repay each month from 10% of their salary to 5% would cost.
A separate analysis by the Committee for a Responsible Federal Budget, which opposed the plan, estimated that the policy would cost an additional $120 billion.
Republicans criticized the plan as wasteful spending.
“CBO’s $400 billion cost estimate shows this administration has lost all sense of fiscal responsibility,” said North Carolina Rep. Virginia Foxx, the top Republican on the House Education Committee. “Rather than working with Congress to bring down college costs, President Biden has opted to bury the American people under our unsustainable debt.”
Senate Majority Leader Chuck Schumer and Massachusetts Sen. Elizabeth Warren, who pushed Biden on student debt relief, compared the cost of the plan to former President Donald Trump’s $2 trillion tax cut, which mostly benefited the wealthy and corporations.
“It is clear the pandemic payment pause and student debt cancellation are policies that demonstrate how government can and should invest in working people, not the wealthy and billionaire corporations,” they said in a joint statement.