August 24, 2022

Biden Administration Cancels Debt for Wealthy Borrowers at More Than $330 Billion Cost to American Taxpayers

In response to the Biden Administration’s announcement today that it is initiating a plan to forgive up to $20,000 in student loan debt for households earning up to $250,000, House Budget Committee Republican Leader Jason Smith (MO-08) and House Education and Labor Committee Republican Leader Virginia Foxx (NC-05) released a fact sheet detailing the more than $330 billion cost of the Administration’s plan as well as how this action will benefit wealthy borrowers and those with multiple college degrees. Today’s announcement also comes alongside another extension of the moratorium on student loan repayment which will further exacerbate the inflation crisis and has cost American taxpayers an additional $100 billion.
“With the ink barely dry on the Washington Democrats’ $745 billion Inflation Act that provides welfare to the wealthy and big corporations, the Biden Administration — whose own Office of Management and Budget just yesterday increased their 2022 inflation projections and lowered their economic growth projections — has now unveiled a plan that will throw more fuel on the inflation fire by erasing debt for wealthy families earning as much as $250,000, at a cost to American taxpayers of more than $330 billion,” said House Budget Committee Republican Leader Smith. “President Biden and Washington Democrats are engaged in a desperate pander to their far-left political supporters with this massive financial handout to wealthy individuals with graduate degrees, who hold more than half of all student loan debt. Under this plan, 87 percent of adults without student loans will be forced to bail out the 13 percent of adults who chose to take on loans. This immoral transfer of wealth from the working class to the wealthy comes on top of the Biden Administration’s completely illogical decision to issue yet another extension of the COVID-era moratorium on student loan repayments, which also disproportionately benefits high income earners. It is exactly actions like these from government which has led to the worst inflation crisis in 40 years, workforce shortages, and now a recession.” “Hardworking taxpayers in every town, community, and neighborhood across the country have had enough. They’ve watched the Biden administration double down on reckless spending sprees that have caused record high inflation. This $300 plus billion transfer of wealth to the 13 percent of Americans who have student loans makes clear what the priorities of this administration are,” said House Education and Labor Committee Republican Leader Foxx. “On average, those receiving relief will go on to make over a million dollars more than the Americans who never attended college and are forced to foot the bill for someone else’s degree. The unjustifiable actions taken by this administration serve as the perfect case study as to why Americans distrust the federal government so much.” Key Points $330+ billion Cost to Taxpayers from Biden Debt Cancelation Plan for Families Earning up to $250,000 Biden Administration Plan is a Transfer of Wealth
  • 87% of adults without student loans will be forced to pay for the 13% of adults who choose to take on loans.
  • 70% of the benefit from canceling student loan debt will go to those in the top half of the income spectrum.
  • 56% of all student loan debt is owed by the 14.3% of individuals with advanced degrees.
Taxpayers are Footing the Bill for Biden's Loan and Interest Repayment Moratorium
  • $4.3 billion per month cost to U.S. taxpayers from loan and interest repayment moratorium.
  • $100 billion total cost to taxpayers from loan repayment moratorium since Biden took office.
An analysis by the Congressional Budget Office has previously confirmed that other major executive actions by President Biden will already cost American taxpayers a combined $532 billion.