President Joe Biden’s Department of Education has proposed a student loan forgiveness plan to take effect after President-elect Donald Trump takes office in January.
While the Department of Education puts the estimated cost at $112 billion, one analyst called it a “gross underestimate” and suggested the cost could be five times larger.
An economist and public policy analyst who spoke to The College Fix also criticized the regulation as “worrisome.”
The department opened comments on Oct. 31, just days before the election. The comment period for the proposed regulation just closed on Monday, Dec. 2. It has been in the works since at least February.
According to the new proposal, this act would “specify the Secretary’s authority to waive all or part of any student loan debts owed to the Department based on the Secretary’s determination that a borrower has experienced or is experiencing hardship related to such a loan.”
The Education Department uses a broad definition of “hardship” as that which is “likely to impair the borrower’s ability to fully repay the Federal government” or that which “renders the costs of enforcing the full amount of the debt not justified by the expected benefits of continued collection of the entire debt.”
While the official cost estimate of the proposal is $112 billion, Cooper told The Fix that “independent analysts at the Committee for a Responsible Federal Budget have estimated that it could cost as much as $600 billion [over the next 10 years].”
