Report: Student loan forgiveness could cost each taxpayer over $2,500

A new report published this week by the conservative advocacy group the National Taxpayers Union Foundation found that President Biden’s student loan forgiveness program could cost taxpayers $2,500 each.

The report, released on Wednesday, estimates the approximate cost of federal student debt forgiveness will ultimately put a burden of $2,503.22 per US taxpayer. The study explains the calculation is based simply on an even division of the costs between all US taxpayers. This is inconsistent with the way the cost of student loan forgiveness will actually be spread out among taxpayers, however. 

In practice, the cost burden of the forgiveness program will be paid based on income level. Higher earning taxpayers will foot more of the forgiveness bill than lower earners, so the actual figure that each individual taxpayer will contribute to the forgiveness program will vary.

The total cost of Biden’s loan forgiveness initiative is estimated at over $400 billion, and those who make $200,000 to $500,000 a year would actually incur a tax burden of about $11,940 per taxpayer. Those who make less than $50,000 a year would only incur a tax burden of about $190, according to CNBC.

According to the Wharton School of Business at the University of Pennsylvania, Biden’s debt cancellation plan will cost about $519 billion, which would make the cost to individual taxpayers higher than the NTUF estimate.

Penn Wharton also predicts the forbearance program will cost about $16 billion, and the Income Driven Repayment plan included in the relief program will cost about $70 billion over 10 years.