REPORT: Biden’s new student loan repayment plan would cost A LOT more than White House projected

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As the most reliable and balanced news aggregation service on the internet, DML News App offers the following information published by FOXBUSINESS.COM:

A key part of President Biden’s student loan debt plan that would cut the monthly bill for certain borrowers could cost up to $361 billion over the next decade, according to new findings from the Penn Wharton Budget Model.

The proposed rule from the Education Department would overhaul one of the income-driven repayment plans – known as REPAYE – by further reducing borrowers’ payments to a certain percentage of their discretionary income.

“We cannot return to the same broken system we had before the pandemic, when a million borrowers defaulted on their loans a year and snowballing interest left millions owing more than they initially borrowed,” Education Secretary Miguel Cardona said in a statement.

The report notes that Biden’s debt relief plan would reduce monthly obligations for undergraduate borrowers by as much as half, but it is projected to cost between $333 billion to $361 billion, according to the Penn Wharton Budget Model.

The projected cost is over DOUBLE the net federal budget impact of $137.9 billion provided by the Department of Education.

Fox Business explained:

The discrepancy is because the government assumed that enrollment in the income-driven plans would remain constant, while Penn Wharton projected the more generous plan would cause the take-up rate to jump from 33% to 75% of eligible loan volume. 

Meanwhile, Sec. Cardona tweeted on Monday, “Over 40M borrowers qualify for student debt relief – with 90% earning less than $75,000/yr. That’s 321,000 in Connecticut, 228,000 in Kansas & 2.1M in Texas, who could avoid delinquency & default as they return to repayment.”

Last week, Joe Biden and Sen. Bernie Sanders teamed up in a video statement, pushing for student loan forgiveness, and blasting Republicans for opposing it.

To get more information about this article, please visit FOXBUSINESS.COM.

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  1. Disgusting!!!! I never stepped a foot in college!! I work retail. It’s my fault some moron took out a massive loan and took a job that can’t make the payments on their debt.

  2. Those who are looking for a loan waiver or defaulted on their student loans are getting a crash course in government funding 101. Where else can you spend far more than what has been budgeted to you and keep asking for more like it’s our fault for not wanting to write a blank check.

  3. Why not just drop all interest and penalties on all loans in an effort to get the loan money back from older loans. Maybe like loans older that 5 or 10 years. Give people a path to pay the old loans back instead of letting them hang there ringing up impossible fees and interest.
    I think most people want to repay, it probably kills your drive once you get tons of penalties

  4. I’ve got 2 college kids and I’ll tell you this – IF kids applied themselves and parents and kids spoke to their high school counselors they’d KNOW there are many ways to get scholarships to cover some or all of their college.

    When you don’t apply yourself in high school, then you don’t apply yourself in HOW to get to college, and you don’t apply for scholarships — you lose out and then complain.

    Your bill, not mine!
    Both kids have ALL of their college classes covered and I’m middle class America.


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