Student-loan relief would cost the government $321 billion but allies plan to keep up the pressure for $50K relief, a report says
- Joe Biden's student-loan relief would forgive at least $10K per borrower.
- But allies are pushing for the forgiveness of $50K, Bloomberg reported.
President Joe Biden's student-loan relief would cost the government $321 billion if borrowers are forgiven at least $10k, according to the Federal Reserve Bank of New York.
Biden's allies, however, are pushing for the forgiveness of $50,000 per borrower. Representative James Clyburn, a close ally of the president, told Bloomberg on Saturday: "When you see a student coming out of college – law school or professional schools – with $130,000, $150,000 in debt, that cripples the economy in more ways than one."
Rep. Clyburn added that forgiving student-loan borrowers would "stimulate the economy in many ways."
Biden, who wants to forgive at least $10,000 in student loan debt, sought to pass the debt-relief bill through Congress but is now pondering over an executive order. "I am considering dealing with some [student] debt reduction," the President said at the White House on Thursday.
However, he added he is "not considering $50,000 debt reduction but I'm in the process of taking a hard look at whether there will be additional debt forgiveness."
The Federal Reserve Bank of New York found in its analysis that forgiving $10,000 per borrower would cost the government $321 billion, eliminate the entire balance for 31.1% of borrowers, and cancel 30.5% of loans delinquent or in default.
According to the Education Data Initiative, 43.4 million borrowers have federal student loan debt, totaling more than $1.6 trillion in federal loan debt. On average, a student borrows $30,030 to attain a bachelor's degree.
Clyburn told Bloomberg he thought students were deserving of more than $10,000 forgiveness, "simply because in past years what we have found is that when given the opportunity, the forces that be have ratcheted up interest and all sorts of fees on student loans."