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CBO Confirms Biden’s Student Loan Giveaway Costs Taxpayers Nearly Half a Trillion This Year

October 12, 2022

Despite President Biden’s claims that his Student Loan Giveaway wouldn’t add much to the U.S. deficit in the short term, a new report from the Congressional Budget Office (CBO) proves the opposite. 

The nonpartisan experts found that the giveaway will add $426 billion – nearly half a trillion – to the U.S. deficit this year. 

As the Wall Street Journal editorial board writes:

“We were amused this week to read the assertion in a prominent progressive newspaper that, while Mr. Biden often says things that are false, they usually concern small matters. Does nearly half a trillion dollars in misstated deficit math qualify as small? Asking for a taxpayer friend.”

Despite historic revenues thanks to the GOP Tax Cuts and Jobs Act (TCJA), Democrats’ runaway spending will push the U.S. deficit to $1.4 trillion this year. 

Read the full editorial here


Despite his claims, President Biden isn’t reducing the deficit.

  • The Washington Post’s Fact Checker gave President Biden “Three Pinocchios” noting that he is “playing a rhetorical shell game. He’s trying to dazzle listeners with impressive-sounding numbers. But the reality is he’s increased the budget deficit, not reduced it.”
  • As the WSJ editorial board writes: “The total deficit fell sharply from fiscal 2021 as many pandemic-era programs finally lapsed. But it should have been much lower because taxpayers sent a remarkable $850 billion more to Washington than in 2021.”
  • The CBO report shows the U.S. deficit will reach $1.4 trillion this year.

President Biden’s $600 billion student loan giveaway is a massive transfer of wealth that will worsen inflation. 

  • The Penn-Wharton Budget Model estimates that forgiving federal college student loan debt will cost between $300 billion and $980 billion over the next 10 years. 
  • Most of the debt is held by borrowers in the top 60 percent of income distributions. And 87 percent of American adults don’t have student loans. 
  • Student loan forgiveness is a giveaway to highly educated college grads. The Committee for a Responsible Federal Budget points out, “…debt cancellation gives a much higher proportion of its benefit to top earners. For example, a report from the University of Chicago showed that the top 10 percent of earners receive more from cancellation than the entire bottom 30 percent of earners.” 
  • Even former Obama-Biden top economic advisor Larry Summers – a former university president himself – issued a warning that Biden’s mass student loan giveaway will worsen inflation: “‘Student loan relief is not free. It would be paid for. Part of it would be paid for by the 87 percent of Americans who do not benefit but lose out from inflation,’ Summers said.”

READ: Analysis: Biden’s Student Loan Giveaway Would Benefit Highest Earners Most

READ: STUDY: Wealthy Reap Vast Majority of Benefits from Biden’s Student Loan Giveaway

Pursuing mass student loan forgiveness ignores the real problems most Americans are facing.

  • Forgiving $10,000 of student loan debt per person does nothing to bring down inflation.
  • Massive student loan forgiveness fails to address the skyrocketing costs of higher education, and instead will only exacerbate it.
  • Student loan debt forgiveness will create the expectation of future debt forgiveness and will incentivize students to borrow more not less.