Bharat Ramamurti, director of Biden's National Economic Council, joined White House press secretary Karine Jean-Pierre at Friday's briefing in describing the assessed cost at $24 billion per year for the next ten years.
"We estimate that the debt relief proposal will reduce average annual receipts in the student loan program by about $24 billion a year over the next ten years. So the way to think about this is that, because we are providing debt relief, reducing the outstanding balance for some people, eliminating it for other people, that means we're not going to be collecting a certain amount of payments that we otherwise would have been collecting," he explained.
Ramamurti added, "for context," $24 billion "represents 1.5% of the deficit reduction that we are projecting for this fiscal year before the announcement, and it is far less than the $350 billion-plus that we've already done in PPP loan forgiveness since last July."
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He cited the White House's past opinion that the plan "pays for itself."
"This is paid for and far more by the amount of deficit reduction that we're already on track for this year," Ramamurti stated. "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."
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Some 40 million people in the United States hold a collective $1.7 trillion in student loans. To be eligible for Biden's cancellation program, borrowers will need to earn under $125,000 individually or $250,000 as a household, and those who received a Pell Grant can get up to $20,000 canceled, which the Biden administration is encouraging as a way to close the racial wealth gap because black borrowers are twice as likely to receive Pell Grants.
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The $125,000 income threshold means the top 5% of income earners will not be eligible for loan forgiveness, White House staffers said on a call with reporters following the announcement. According to the Education Data Initiative, the average student loan debt is $37,693.
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Conservatives have opposed the idea for months, delivering a blue-collar criticism of the Democratic stance on student loans and saying Biden will live to regret his moves because 87% of people do not have student loans.
"What does it say for all those folks? Boy, you were really stupid here," former Education Secretary Betsy DeVos told the Washington Examiner in June.
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