White House says student loan forgiveness
plan will cost $24 billion a year
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[August 26, 2022]
By Costas Pitas
(Reuters) - A U.S. plan announced this week
to forgive $10,000 in student loans for millions of debt-saddled former
college students will cost roughly $24 billion a year assuming that
three quarters of those eligible take up the offer, the White House
said. |
![](../images/082622PIX/news_w14.jpg)
Empty boxes are taken out during move in day
as Bennett College students return to campus for the first time since
the HBCU Liberal Arts College went remote to prevent the spread of the
coronavirus disease (COVID-19) in March 2020, in Greensboro, North
Carolina, U.S., August 30, 2021. REUTERS/Gabrielle Crockett/File Photo |
The
move, announced by President Joe Biden on Wednesday, kept a
pledge he made in the 2020 campaign for the White House and
could boost support for his fellow Democrats in the November
congressional elections.
Some economists said it may fuel inflation and Republicans
mostly oppose student loan forgiveness, calling it unfair
because it will disproportionately help people earning higher
incomes.
On Wednesday, the White House said it had yet to determine the
price tag for the package but on Thursday, White House
spokesperson Karine Jean-Pierre told CNN:
"Assuming that 75% of folks take us on on the President's
student loan cancellation plan, and you look at the average cash
flow on that, it's going to be about $24 billion per year."
American university tuition fees are substantially higher than
in most other rich countries, and U.S. consumers carry $1.75
trillion in student loan debt, most of it held by the federal
government.
(Reporting by Costas Pitas in Los Angeles; Editing by Christian
Schmollinger and Jacqueline Wong)
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