What is the Cost of Canceling Student Debt?
|The Impact of Student Loan Debt Cancellation: Costs, Proposals, and Considerations
The Biden administration has been making headlines with its student loan debt cancellation efforts, having already canceled almost $168.5 billion in student loan debt. However, the President has plans for further debt cancellation that could cost taxpayers an estimated $1.6 trillion.
One of the proposed plans is the Saving on a Valuable Education (SAVE) plan, which aims to cancel student debt for approximately 8 million borrowers who have been repaying their federal student loans for at least 10 years. The plan has been met with some legal challenges, with a federal appeals court recently blocking key aspects of the SAVE plan.
Additionally, Senators Warren, Pressley, Schumer, and Sanders have put forward their own plan for student debt cancellation, which includes eliminating debt that exceeds the original principal balance, canceling debt for borrowers who have paid their original principal balance, and expanding hardship qualifications.
The cost of student debt cancellation is a significant factor, with total student loan debt in the U.S. nearing $1.6 trillion. While canceling debt can provide relief for borrowers, it also comes at a cost to taxpayers.
Overall, the debate around student loan debt cancellation continues, with arguments for both the positive impacts on individuals and the economy, as well as the potential financial burden on taxpayers. As the issue evolves, it will be important to consider the various proposals and their implications for all stakeholders involved.