Leaders.com
  • Business
  • Leadership
  • Wealth
  • Master Classes
  • Business
    • Entrepreneurs
    • Executives
    • Marketing and Sales
    • Social Media
    • Innovation
    • Women in Business
  • Leadership
    • Personal Growth
    • Company Culture
    • Public Speaking
    • Productivity
    • Hiring
    • Social Issues
    • Leaders
  • Wealth
    • Investing
    • Cryptocurrency
    • Retirement
    • Venture Capital
    • Loans and Borrowing
    • Taxes
    • Markets
    • Real Estate
  • Master Classes
Public Policy

CBO has calculated what it might cost the nation to forgive college student loans (Photo by Sarah Reingewirtz/MediaNews Group/Los Angeles Daily News via Getty Images)

By Tyler Hummel Leaders Staff

Tyler Hummel

Tyler Hummel

Tyler Hummel is a news writer for Leaders Media. He was the Fall 2021 College Fix Fellow and Health Care...

Full bio


Learn about our editorial policy

Sep 27, 2022

Calculating the Real Cost of Student-Loan Forgiveness 

According to a report by the Congressional Budget Office, student-loan forgiveness is going to come at a high cost. 

Key Details

  • The Congressional Budget Office (CBO) says in a Monday letter that student-loan forgiveness is going to cost $400 billion over 10 years. 
  • “The cost of outstanding student loans will increase by $20 billion because an action suspended payments, interest accrual, and involuntary collections from September 2022 to December 2022,” says CBO. 
  • “CBO’s estimates are highly uncertain,” the group reports. “The most uncertain components are the projections of how much borrowers would repay if the executive action canceling debt had not been undertaken and how much they will repay under that executive action.” 
  • There is $1.6 trillion in outstanding student loan debt among 43 million borrowers. The CBO projects that $430 billion of it will be canceled by President Joe Biden’s executive order, and 90% of borrowers may be eligible for forgiveness. 

Why it’s news 

The letter confirms what many watchdogs and analysts have warned over the past month, that student loan forgiveness is going to cost a lot of money and have some negative effects on the budget and economy. 

As we previously reported, the CBO projected that student loan forgiveness would radically increase the deficit before the end of the fiscal year. 

Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, warned that the policy will increase deficits, increase inflation, and up the risk of recession—and that the executive order is doing without congressional approval was a mistake. 

The White House has defended the expenditure by showing that outstanding student loan debt is crippling to the middle class.

“The White House on Monday pushed back on a report by the Congressional Budget Office released earlier that day, arguing that 90% of federal student loan borrowers are unlikely to take advantage of President Biden’s forgiveness plan,” says The Hill. 

“While the CBO estimate is meant to reflect the full effects over the entire lifespan of the program, the annual cash flow effects—which is what matters for the federal debt and for economic impacts—are much smaller,” says a White House memo. 

Backing up a bit

“Biden last month announced a plan to forgive $10,000 in federal student loans for borrowers who earn less than $125,000 a year, or have a household income of under $250,000 if filing jointly. Low-income Pell Grant borrowers are eligible for an additional $10,000 cut,” says CNBC. 

“The White House says more than 40 million Americans may be affected by the student loan changes, and half of those could see their entire student debt eliminated.”

Home / News / Calculating the Real Cost of Student-Loan Forgiveness 
Share
FacebookTweetEmailLinkedIn

Related Stories

Wall Street Makes $100 Billion Bet on Weight Loss Pills

by PJ Howland Leaders Staff
Investing

Oct 25, 2023

Ozempic

Investor optimism around a potential blockbuster obesity drug by Structure Therapeutics led to soaring share prices across the weight-loss pharma sector.

Key Details

  • Structure Therapeutics' stock jumped 35% after reporting positive results from early clinical trials of a once-daily weight-loss pill.
  • The experimental drug helped participants lose about 5% of their body weight over one month without side effects, although there are concerns with Ozempic.
  • Analysts predict the global anti-obesity medication market could reach sales of $100 billion by 2030, up from $71 billion currently.
  • With promising growth prospects, investors are betting on companies developing new weight loss drugs like Structure, Eli Lilly, Novo Nordisk, and Pfizer.

Go deeper

FacebookTweetEmailLinkedIn

Seattle Takes The Crown For Advanced Tech Talent

by PJ Howland Leaders Staff
Tech

Oct 24, 2023

Seattle tech talent

Seattle has emerged as the metro area with the most advanced tech talent, beating out tech hubs like San Francisco and Silicon Valley.

Key Details

  • According to a new ranking by the Burning Glass Institute, Seattle has the highest proportion of advanced tech workers compared to other cities with similarly sized tech workforces.
  • The ranking evaluated 60 million high-paying, in-demand tech job postings and histories to identify cities with cutting-edge roles like AI and cybersecurity rather than legacy tech positions.
  • With tech giants Amazon and Microsoft headquartered in Seattle, the city edged out the San Francisco Bay Area, Boston, Austin, and Raleigh on the list.
  • The report found that demand for software developers and IT support specialists has declined over the past five years as companies seek more specialized tech talent.

Go deeper

FacebookTweetEmailLinkedIn

More Americans Can’t Keep Up With Car Payments

by Colin Baker Leaders Staff
Loans and Borrowing

Oct 23, 2023

car loans, used cars

A record number of Americans are behind on their car loan payments as higher interest rates and prices weigh on consumers.

Key Details

  • According to data from Fitch Ratings, 6.11% of car loans were at least 60 days delinquent in September, the highest since tracking began in the early 2000s.
  • Some interest rates on used cars can rise to as much as 21%, according to Bankrate.
  • Soaring prices and rising interest rates are squeezing consumers, making it difficult for some to keep up with their auto loans.

Go deeper

FacebookTweetEmailLinkedIn
Chevron Gas Deal
Markets

Oct 23, 2023

Chevron Makes $53 Billion Deal Amid Surging Gas Prices

by PJ Howland Leaders Staff
nike logo
Company Culture

Oct 20, 2023

Nike to Require More In-Office Days From Employees

by Colin Baker Leaders Staff
blue collar workers
Retirement

Oct 20, 2023

Explaining The ‘C+ Grade’ Retirement Ecosystem in The United States

by PJ Howland Leaders Staff

Recent Articles

Hiring

Nov 1, 2023

Learn the Winning Answers to the Most Common Phone Interview Questions

Come to your next phone interview fully prepared

Personal Growth

Oct 30, 2023

85 Quotes on Self-Love to Boost Your Self-Esteem

Don’t fall into the trap of harsh self-criticism

Company Culture

Oct 27, 2023

What is a Sabbatical? Your Ticket to Restful Growth and Meaning

Sabbaticals can benefits both employees and businesses

  • Business
  • Leadership
  • Wealth
Join the Leaders Community

Get exclusive tools and resources you need to grow as a leader and scale a purpose-driven business.

Subscribing indicates your consent to our Terms & Conditions and Privacy Policy

Leaders.com
  • Privacy Policy
  • About
  • Careers
  • Cookie Policy
  • Terms
  • Disclosures
  • Editorial Policy
  • Member Login

© 2025 Leaders.com - All rights reserved.

Search Leaders.com