On Wednesday, President Biden finally unveiled the specifics of his student loan bailout. As it turns out, it’s even more expensive than we thought.
Reports had previously suggested that Biden planned to “cancel” (aka transfer to taxpayers) $10,000 per borrower for those earning less than $125,000. The president’s actual plan unveiled yesterday does exactly this. But, it also included an additional twist: $20,000 in debt transfer (rather than $10,000) for individuals who received Pell Grants, a major form of federal financial aid. It also included a special plan for income-based repayment. As a result, Biden’s plan is going to cost taxpayers way more than we previously estimated—and it already wasn’t cheap.
Prior to the specifics being released, the nonpartisan Committee for a Responsible Federal Budget estimated that it would cost about $300 billion, which averages out to more than $2,000 per federal taxpayer. However, with the additional Pell Grant provision, the Committee reports that the full cost will rise to at least $500 billion. Averaging out to roughly $3,500 per taxpayer, that’s a heck of a lot more than before.
The Committee reached some harsh conclusions about Biden’s plan.
“The changes announced today will likely cost more than double the amount saved through the recently passed Inflation Reduction Act, completely eliminating any disinflationary benefit from the bill,” the experts conclude. “The proposed loan changes also do nothing to reduce the amount of borrowing moving forward, setting up a future administration to be called on to cancel debt again.”
my brother in christ… there's no such thing as "free" anything https://t.co/ccQAyE7OgY
— Brad Polumbo 🇺🇸⚽️🏳️🌈 (@brad_polumbo) August 25, 2022
Americans need to keep this reality in mind when they hear all the progressive fluff and rhetoric about how this is just helping people. There’s no such thing as “free” anything. This probably illegal bailout will only help an educated, relatively affluent slice of society—and it’s going to come at tremendous expense to taxpayers like you and me.