White House estimates student loan forgiveness will cost $24 billion a year

The White House announced on Friday that President Biden’s student loan forgiveness program will cost approximately $24 billion per year over the next 10 years.

Bharat Ramamurti, who is the Deputy Director for the National Economic Policy defended the price tag when addressing reporters on Friday.

“Let’s put that $24 billion in context. That represents 1.5 percent of the deficit reduction that we are projecting for this fiscal year before the announcement.” Ramamurti said the Biden administration considers the loan relief already “fully paid for.”

“It is paid for, and far more, by the amount of deficit reduction that we’re already on track for this year,” Ranamurti said. “Practically speaking, compared to the previous year, 1.7 trillion more dollars are coming into the treasury than are going out. 

“We’re using a portion of that, a very small portion of it, to provide relief to middle class families consistent with the President’s plan,” Ranamurti went on to say.

At a press briefing on Thursday, White House Press Secretary Karine Jean-Pierre touted the new policy but stopped short at giving an estimate of how much it would cost.

Jean-Pierre said that the plan to provide debt relief to students would “be fully paid for because of the work that this President has done with the economy.” When pressed about a price tag, Jean-Pierre said “the President’s record on fiscal responsibility is second to none.”

“All of this when it comes to cost will also depend on how many of the loans canceled were actually expected to be repaid, it will depend on how many borrowers actually take up this opportunity before we have a real sense,” she said, adding in regards to cost that the “Department of Education is going to take the lead.”

The White House expects students to be able to apply for debt relief from early October and that students will have a 4–6-week window in which to do so.