And just like that, the price quadrupled.
President Joe Biden announced last week that he was shifting the burden of repaying college student loans from the indebted borrowers to all taxpayers.
That’s not quite how our leftist president put this socialist idea. But the effect is the same: either all taxpayers will cover the funding largely owed to the federal government by current or former college students, or the Federal Reserve must print more money.
When Biden announced the plan last week, one budget watchdog group estimated the cost at $275 billion over 10 years. On Friday, Biden’s administration had lowered that to $240 billion over the next decade.
But even as Biden’s team was saying that on Friday, the Penn Wharton Budget Model, an economic research group at the University of Pennsylvania whose work is widely praised by Democrats, was updating its forecast of eliminating student loan debt for borrowers who make less than $125,000 a year.
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The new cost, according to them, is now $1 trillion – or four times what the Biden administration said it will cost.
On its website, the PWBM broke down its analysis as follows:
Outright cancellation of debt owed by the current targeted group will run between $469 billion and $519 billion.
Extending the COVID-19-related “pause” on current repayments for this year will add another $16 billion.
The administration also revised the income-driven repayment program to cap the monthly amount due each month at 5 percent of the borrower’s income. That’s half the current rate.
The PWBM estimated that that would immediately add another $70 billion onto Biden’s proposal, based on current data. Over time, if conditions remain static, that cost could swell by another $450 billion over 10 years.
Overall, if the predictions hold, the cost of Biden’s generosity with taxpayers’ assets could approach $1.1 trillion – or more than four times what the administration pegged the cost at on Friday.
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The PWBM analysts noted their projections will require additional study as more details become known.
But suffice to say, rarely does the cost of any federal program ever go down.
At this point, it’s safe to bet on the PWBM, rather the guy running the country, whose entire adult career has been spent in government and was rooted in spending other people’s money.
The views and opinions expressed in this commentary are those of the author and do not necessarily reflect the opinion of The Free Press.
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