CBO: "Biden's 'Student Loan Forgiveness Policy' Costs 571 Trillion Won"

[Asia Economy Reporter Yujin Cho] The Congressional Budget Office (CBO) of the United States estimated that the budget required for the student loan forgiveness policy promoted by President Joe Biden will reach $400 billion (approximately 571 trillion won) over the next 10 years.

As controversy arises over whether President Biden's student loan forgiveness measure is a populist policy ahead of the midterm elections in November, this estimate is expected to reignite the debate.

On the 26th (local time), the CBO stated that in addition to the $400 billion, a separate budget of $20 billion will be required for the measure to extend the loan repayment moratorium until the end of the year.

Earlier, President Biden revealed a plan to forgive up to $20,000 per person in student loans during a White House speech last month. The core of the plan is to forgive $10,000 for individuals earning less than $125,000 annually and up to $20,000 for those who received the federal student aid 'Pell Grant.'

The White House estimated that 43 million people would benefit from this plan, and 20 million would be completely relieved from the burden of repaying student loans. President Biden is pushing this forward as an administrative action that does not require congressional approval, and his own budget estimate is expected to be announced within weeks.

Student loan forgiveness was a campaign promise of President Biden. Abdullah Hassan, spokesperson for the White House Office of Management and Budget (OMB), emphasized, "The Biden administration's student debt forgiveness plan will provide breathing room for millions of working families."

Senator Elizabeth Warren (Democrat, Massachusetts) also issued a statement saying, "Thanks to President Biden's historic decision to forgive student loans, it has become clear that millions of middle-class Americans now have more financial breathing room."

The Republican Party criticized the measure, arguing that it could raise fairness issues by using taxes for some Americans who attended college and that it could worsen inflation. The conservative group Job Creators Network announced plans to sue the administration as soon as the Department of Education guidelines are released.