• The Congressional Budget Office predicted that US President Joe Biden’s plan would cost $400 billion.
• The assessment was requested by conservative legislators and produced by an apolitical federal agency.
• Under the proposal, all loans outstanding by those earning less than $125,000 will be reduced by $10,000.

Monday, the Congressional Budget Office predicted that US President Joe Biden’s plan to cancel a portion of the country’s vast student debt plan would cost $400 billion.

The assessment, requested by conservative legislators and produced by an apolitical federal agency, is anticipated to add gasoline to the debate between Democrats and Republicans regarding the topic.

As a result of the debt forgiveness, “CBO estimates that the cost of student loans will increase by about an additional $400 billion in present value,” the report stated.

A White House official, however, noted: “CBO called its own estimate ‘highly uncertain.’ We agree.”

Republicans criticize Biden for wasting public cash on the initiative, suggesting that public funds may be used more effectively.

The idea was unveiled by Biden on August 24, fulfilling a campaign pledge.

Under the relief proposal, all loans outstanding by those earning less than $125,000 will be reduced by $10,000. The relief will be $20,000 for previous students who attended college with need-based federal aid known as Pell grants.

Colleges in the United States frequently cost between $10,000 and $70,000 a year, leaving graduates with crippling debt upon entering the job. According to government estimates, the average debt for US college graduates is $25,000, a sum that could take years or decades to repay.

The policy proposed by Biden continues to be hotly discussed. The estimation of the plan’s cost has sparked a significant technical discussion among specialists and economists, particularly due to the lack of clarity around the loan repayments already made by those who will receive debt forgiveness.

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