Biden Student Loan Prepayment Pause Costs $40B Alone In Unpaid Interest

As the Biden administration again defers repayment of student loans until President Biden's student loan forgiveness executive action makes its way through the courts, a new analysis find the decision to pause will cost taxpayers billions of dollars in unpaid interest.

  • The Committee for a Responsible Federal Budget released the analysis, which said Biden’s changing the repayment restart date from Dec. 31 until 60 days after litigation is decided will cost tens of billions of dollars in lost interest collection.
  • “We estimate extending the pause for 60 days beyond June 30, 2023 would cost $40 billion – the equivalent of 18 months of the Pell Grant program,” the group said. “That would bring the total cost of the student debt pause to $195 billion; continuing to extend the pause through the end of 2024 would increase the total cost of the pause to $275 billion. Every month the pause is extended costs the federal government $5 billion, due mainly to lost interest collection.”
  • Biden said last week that “it isn’t fair to ask tens of millions of borrowers eligible for relief to resume their student debt payments while the courts consider the lawsuit.”
  • Critics  of the forgiveness plan say it significantly increases the deficit and helps affluent Americans at the expense of  less educated, lower-earning  Americans.
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