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The White House on Thursday faced a series of questions about what would be the total cost of its new student loan forgiveness plan, and refused to say if or when it would provide the information.
Officials said Wednesday when President Biden announced the plan that a cost figure wasn’t yet available – and that it would depend on factors like how many people took advantage of the new benefit, default rates, and other factors.
‘I mean that that is something that the Department of Education is going to lead, because this is something that … this is an action that clearly just take in the Department of Education. I don’t have any more to speak on to that just,’ she said at the White House briefing Thursday.
She also wouldn’t say specifically how it would get paid for, amid new outside estimates that the total price tag could be hundreds of billions.
She also cast Biden’s new program as a more responsible alternative to plans that some progressive lawmakers have called for – including having the government forgive up to $50,000 in student loan debt.
White House Press Secretary Karine Jean-Pierre defended the new plan as ‘fiscally responsible’
That is a figure that has been pushed by Senate Majority Leader Charles Schumer and Rep. Alexandria Ocasio-Cortez (D-N.Y.).
‘We see this as a fiscally responsible, balanced approach to doing this. Now remember people have said, why don’t you do 50,000? We don’t want to do that because we want to make sure that we do this in a fiscally responsible way,’ said Jean-Pierre.
The new program that Biden announced allows Americans who make less than $125,000 a year qualify for up to $10,000 of student loan debt forgiven. For Pell Grant recipients, the top figure is $20,000.
President Joe Biden announces student loan relief on August 24, 2022 in the Roosevelt Room of the White House in Washington
Progressive lawmakers including Rep. Alexandria Ocasio-Cortez had called for $50,000 in relief
Biden spent months making a decision, and waited for legal memos from the Education Department and the Justice Department stating that he had the authority to do so based on post-9/11 legislation dealing with national emergencies.
The plan is still certain to draw a court fight, as Republicans bash the plan and even some centrists or Democrats up for reelection raise concerns.
In the absence of an administration cost estimate, outside groups have come up with their own budget analyses. The Penn Wharton model projects it could cost $300 billion over a decade, and the bipartisan Committee for a Responsible Federal Budget puts the figure in the $500 billion range.
‘I’m trying to explain to you how it will offset, how all of this would be offset once the pause is was lifted,’ she said, suggesting it would be paid for.
She was citing administration statements that Biden’s decision to stop a pause on loan repayments for higher-income Americans would bring in revenue that would balance out costs in the short term, amid concerns about high inflation.
But economic officials have not said it would pay for the entire cost of the program.
‘Numerous experts affirm that restarting paused loan payments at around the same time as we provide targeted debt relief will not have any meaningful effect on inflation,’ said domestic policy advisor Susan Rice on Wednesday.
She said no price tag was available. ‘That remains to be determined, and it will be a function of what percentage of eligible borrowers actually take up this opportunity,’ she said.
Deputy director of the National Economic Council Bharat Rammamurti said Wednesday the program would also be balanced by a positive economic impact, and said some borrowers were going to default anyway.
Complicating the situation is that the administration is also stressing record low unemployment and an economic turnaround, even while creating the program without legislative action.
Jean-Pierre said Biden intended the program to help nurses, firefighters and other public servants who can benefit from having their loans wiped out.
‘He wanted to make sure he gave them a little bit of relief, understanding that some folks, some folks are just going to have a little bit of a harder time, even though we’re coming out of a pandemic and the economy has been turned back on because of the work that this President has done.
he wanted to make sure he gave them a little bit of relief, understanding that some folks are just going to have a little bit of a harder time, even though we’re coming out of a pandemic and the economy has been turned back on because of the work that this president has done,’ she said.
‘We know that some people are still suffering,’ she said when pressed.