Biden’s Student Debt Scheme Could Cost $1 Trillion Over the Next Decade

According to researchers at the University of Pennsylvania’s Wharton School of Business, Biden’s student debt plan could balloon to over $1 trillion in the next decade if several conditions take place. 

The study discovered that the plan would cost $605 billion in the upcoming decade under certain assumptions. However, the total cost in other conditions could swell to over $1 trillion. The researchers argue that this scenario “requires further study.”

Biden announced the student debt plan on August 24, 2022 which annulled thousands of dollars in debt for many borrowers, maintains a pause in payments until the end of 2022, and places monthly caps on payments based on a percentage of borrowers’ incomes.

The most talked about part of the plan cancels up to $10,000 in student debt for individuals making less than $125,000. In a similar vein, Pell Grant recipients under the same income cap can qualify for up to $20,000 in debt cancellation. For families, the income cap increases twofold.