President Joe Biden’s new student debt relief plans are projected to cost $84 billion if enacted, according to the Penn Wharton Budget Model. That total includes about $58 billion from waiving accrued and capitalized interest and another $19 billion from eliminating debt for borrowers in repayment for 20 years or more (or 25 years with graduate student debt). It also would come on top of the estimated $475 billion price tag over 10 years for Biden’s earlier SAVE plan, for a total cost of roughly $559 billion.
The PWBM analysis also projects that the new Biden plans would provide debt relief for just over 17 million borrowers, or about 28 million borrowers once the earlier SAVE plan is factored in. The average debt relief from just the newly announced measures would come to about $4,900. The analysis points out that the Biden plan to eliminate debt for borrowers in repayment for more than 20 years (or 25 years for graduate debt) helps about 750,000 individuals in households that, on average, earn more than $310,000 a year — a point that critics are sure to highlight.
