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President Biden’s student loan forgiveness plan could cost $24 billion per year, estimates show

The White House’s Karine Jean-Pierre called Biden’s student loan forgiveness scheme, which is estimated to cost roughly $24 billion each year, “a very expensive” idea.

“Assuming that 75% of folks who take this on, the President’s student loan cancellation plan, and you look at the average monetary, cash flow on that, it’s going to be about $24 billion per year,” she said on “Don Lemon Tonight.”

The forgiveness would be available to federal student loan borrowers who attended public service jobs, such as teaching or working in the nonprofit sector. The plan would also cancel $10,000 of debt for all borrowers.

Jean-Pierre’s comments come as the White House is finalizing the details of the president’s education budget proposal, which is expected to be released next week.

The $24 billion estimate is in line with what some economists have estimated the plan could cost. Mark Zandi, chief economist at Moody’s Analytics, has estimated that cancelling $10,000 in debt for all borrowers would cost $251 billion.

But Jean-Pierre said the cost is worth it.

“The president believes that this is the right thing to do,” she said. “It’s going to provide relief for so many people.”

Biden has made cancelling student debt a key plank of his education plan. He has also proposed free community college and expanding access to early childhood education.

The White House is still working out the details of how the student loan forgiveness would be implemented, but Jean-Pierre said it would be “revenue neutral.”

“We’re going to make sure that we’re taking a look at all different ways in which we can pay for this,” she said. “But the president’s commitment is to make sure that this is revenue neutral.”

The administration has not ruled out using money from the $1.9 trillion coronavirus relief package to pay for the plan, but Jean-Pierre said they are still “looking at all different options.”

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