In late February, the Supreme Court is scheduled to hear arguments for and against Bidens massive overhaul of student loan repayments.
The final verdict will conclude if his plan is legal and will be carried out. However, the White House has seriously underestimated what the cost is going to be. Or they hid it from American citizens.
The new student loan repayment regulations were launched alongside the cancellation plan. However, they received far less attention than the cancellation plan. According to The Hill, But the regulatory changes, if enacted, would turn a safety net program initially designed to aid those struggling economically into a widespread giveaway program and would cost taxpayers far more than the White House is letting on.
The student loan program currently offers an income-driven repayment plan. This is available for individuals that meet income requirements. Participants are only required to pay a small payment that coincides nicely with their income. They announced the new regulations for the plan last month, even though mass media overlooked it.
The new plan will allow borrowers that meet income requirements to have loans forgiven in half the time as long as they make payments on time, increase the income threshold, and prevent interest from adding up when these borrowers dont make monthly payments. Overall, it will cost taxpayers $138 billion, spread out over the next ten years.
Thats shocking, but according to one study, this number is underestimated. The Hill reports, Analysis from the Penn Wharton Budget Model, published by the University of Pennsylvania, suggests that the total cost will exceed White House estimates by a factor of two, coming in with costs estimated to be between $333 billion and $361 billion over the 10-year budget window.
However, the Biden administration has yet to publicly announce the fact that their figure assumes the cancellation plan will go through or admit that they have the wrong numbers.
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