(NewsNation) — The Congressional Budget Office estimates that President Joe Biden’s plan for student debt cancellation will cost about $400 billion over the next 30 years.
The figures were released Monday in response to a request from Republican lawmakers who oppose Biden’s plan in large part because of its costs. They cited the estimates as evidence that the plan will “bury” taxpayers, passing along the costs to huge numbers of Americans who never went to college.
The Biden administration previously estimated the plan would cost about $24 billion a year over the next 10 years — about $240 billion for the decade — while other estimates put the total cost at $500 billion or more over the decade.
On Monday, the White House noted that the CBO’s estimated cost in the first year — $21 billion — is actually lower than the administration’s early estimate of $24 billion.
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To reach the CBO’s $400 billion figure, officials looked at the immediate cost of cancellation along with the longer-term impact, including lower monthly repayments that would have been higher if not for the cancellation.
The office separately estimated that Biden’s latest extension of a student loan pause will cost an additional $20 billion. Monthly payments on federal student loans have been frozen since the first weeks of the pandemic. Biden in August continued the pause through the end of the year, calling that the final extension.
Biden has played down the cost of the cancellation plan, saying it would be offset by other measures to reduce the federal deficit, including his landmark Inflation Reduction Act. On Monday, the White House defended the plan, saying it will provide relief to struggling borrowers, allowing them to start businesses, buy homes or just pay their bills.
The administration is expected to release its own detailed cost estimates in the coming weeks.
The Associated Press contributed to this report.