'ECONOMICALLY UNJUSTIFIED': Biden's latest student loan pause may cost taxpayers big time
CRFB noted that because the pause costs over $5 billion per month, mostly due to lost interest collection, a potential future extension through the end of 2024 would bring the cumulative cost to $275 billion. , as it "estimated the pause could add up to 20 basis points to inflationary pressures, which could lead the Federal Reserve to further raise interest rates and increase the risk of a deeper recession.
If upheld, Biden's plan would cancel up to $10,000 in student loan debt per borrower – or $20,000 for Pell Grant recipients – if the borrower's income was below $125,000 in either 2020 or 2021, or married couples who made less than $250,000 annually in those years. An estimated 8 million federal student loan borrowers would be eligible for the cancelation, although they may choose to opt out if they prefer.
Education Secretary Miguel Cardona blamed Republicans for the courts blocking Biden's cancelation plan, saying in a statement, "We’re extending the payment pause because it would be deeply unfair to ask borrowers to pay a debt that they wouldn’t have to pay, were it not for the baseless lawsuits brought by Republican officials and special interests."
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