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Biden student loan handout to cost roughly $500B, according to Committee for a Responsible Federal Budget

Fox Business 8/25/2022 Anders Hagstrom
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President Biden's federal student loan forgiveness plan will cost U.S. taxpayers between $440 and $600 billion over the next 10 years, according to the Committee for a Responsible Federal Budget.

The Committee for a Responsible Federal Budget settled on a central estimate of approximately $500 billion.

Biden announced up to $20,000 in federal student loan forgiveness on Wednesday. Students who attended college using federal Pell Grants qualify for the $20,000, but those who did not use the program qualify for $10,000 in forgiveness. The handout only applies to borrowers making less than $125,000 per year.

The CRFB says the central estimate for the program's cost is $500 billion, according to a Thursday report.

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President Biden speaks about student loan debt forgiveness in the Roosevelt Room of the White House, Wednesday, Aug. 24, 2022, in Washington. AP Photo/Evan Vucci © AP Photo/Evan Vucci President Biden speaks about student loan debt forgiveness in the Roosevelt Room of the White House, Wednesday, Aug. 24, 2022, in Washington. AP Photo/Evan Vucci

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More than 43 million Americans have federal student debt, amounting to a total of more than $1.6 trillion. Nearly one third of those owe less than $10,000 and more than half owe less than $20,000, according to the latest federal data.

Critics have argued Biden's program will contribute to already record-high levels of inflation in the U.S.

Senate Minority Leader Mitch McConnell argued the program is "yet another way to make inflation even worse, reward far-left activists, and achieve nothing for millions of working American families who can barely tread water."

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NYCC graduate students seen entering the CCNY Commencement Ceremony. City College of New York (CCNY) recognized the graduates of the Class of 2022 at their 169th Commencement Ceremony. Erik McGregor/LightRocket via Getty Images © Photo by Erik McGregor/LightRocket via Getty Images NYCC graduate students seen entering the CCNY Commencement Ceremony. City College of New York (CCNY) recognized the graduates of the Class of 2022 at their 169th Commencement Ceremony. Erik McGregor/LightRocket via Getty Images

Biden, however, touted the program as a fulfillment of his campaign promise to cancel $10,000 in student debt. Democrats had initially stated that the White House lacks the authority to unilaterally cancel debt and that the president must go through Congress.

"People think that the President of the United States has the power for debt forgiveness. He does not. He can postpone, he can delay, but he does not have that power. That has to be an act of Congress," House Speaker Nancy Pelosi said in 2021.

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Biden himself doubted his authority to cancel debt through executive order last year.

"I don’t think I have the authority to do it by signing the pen," he said in February.

This is a developing story. Check back soon for updates.

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