Including the Biden Administration’s new student debt cancellation plan, we estimate all recent student debt cancellation policies will cost a combined $870 billion to $1.4 trillion. That’s more than all federal spending on higher education over the nation’s entire history. The vast majority of this debt cancellation was put in place through executive actions under President Biden.
$620 billion of debt cancellation has already been implemented, including $275 billion from President Biden’s new Income-Driven Repayment (IDR) program known as SAVE, $195 billion from cancelling interest as part of nearly 41 months of repayment pauses since March of 2020, and roughly $150 billion from a variety of more targeted actions such as discharging debt for those who attended closing schools and making it easier to cancel debt under existing loan forgiveness programs. The President’s newest debt cancellation scheme could cost an additional $250 to $750 billion based on our preliminary estimates.