President Biden’s student loan bailout could cost taxpayers as much as three-quarters of a trillion dollars, new estimate finds
President Biden’s latest plan to cancel student loan debt for millions of borrowers will cost taxpayers far more than its official price tag, and it could reach as high as three-quarters of a trillion dollars, according to a new report.
The administration’s proposal, announced last week, replaces the White House’s previous attempt to deliver broad student loan forgiveness, which was struck down by the Supreme Court.
The Department of Education (DOE) estimates that the new plan, which would cancel student debt for up to 30 million borrowers, will cost around $150 billion over a decade. However, the Committee for a Responsible Federal Budget (CRFB) reported that depending on how the details shake out, it could cost three times that amount.
The CRFB says the DOE’s estimate “excludes a proposal to allow the Secretary of Education to cancel debt for those facing hardship or likely to default. Including this provision, we estimate the plan could cost $250 billion to $750 billion, depending on how the additional cancellation is designed.”
A recent federal study on graduation rates for American colleges and universities shows that 40% of all students did not earn a degree or credential within eight years of leaving high school. The graduation rate is even lower for low-income students.
Among students from families with income levels of US$115,000 or more, 66% who enrolled in higher education earned a bachelor’s degree or higher from 2009 through 2021. However, among students from families who made less than $35,000, 26% earned a bachelor’s degree or higher during the same period. For people whose families had earnings between $35,000 and $55,000, 36% earned these degrees.
Many start but don’t finish
The problem goes beyond the fact that students from lower-income households are entering higher education at a lower rate than high-income students. Rather, the issue is also that fewer low-income students are graduating.
In light of the disturbing and defamatory public comments made by U.S. Department of Education Secretary Miguel Cardona last week during a House Appropriations Committee hearing, Grand Canyon University is providing the following statement.
This response is prefaced with the comment that our disagreements with the Department of Education (ED) are not politically motivated. We are not anti-government and have a record of cooperation and great relationships with 26 different regulatory and accrediting bodies, none of whom have corroborated what ED is claiming. We are an educational institution that is doing an exemplary job of addressing the many challenges that are plaguing higher education while also living out our Christian mission both on our campus and in the surrounding community. That is reflected in the growing demand from students and families who are seeking a higher education option at GCU that is affordable and taught from a Christian worldview perspective. That mission, not politics, is our motivation and it is our hope that we can again put our full attention to those efforts in the near future.
Mr. Cardona’s inflammatory comments, which are legally and factually incorrect, are so reckless that GCU has no choice but to demand an immediate retraction. He is either confused, misinformed or does not understand the actions taken by his own agency.
The Education Department’s long-awaited regulations also provide protections for pregnant students and employees.
The U.S. Department of Education on Friday issued its long-awaited Title IX rule, which for the first time enshrines protections for LGBTQI+ students and employees, as well as pregnant students and employees,under the civil rights law that prevents sex-based discrimination in federally funded education programs.
“No one should have to give up their dreams of attending or finishing school because they’re pregnant,” said U.S. Secretary of Education Miguel Cardona in a press briefing late Thursday. “No one should face bullying or discrimination just because of who they are or who they love. Sadly, this happens all too often.”
Among other changes, the new rule defines sex-based harassment as including harassment based on sex stereotypes, sex characteristics, pregnancy and related conditions, and gender identity and sexual orientation. It cements federal protections for LGTBQI+ students and employees that have swung between administrations for over a decade.