As the administration – inaccurately – takes credit for deficit reduction, it adds to unnecessary spending.
Note: (11/22/2022): The Department of Education announced it would extend the pause to the sooner of 60 days after resolution of the student debt cancellation litigation or 60 days after June 30, 2023 (which would be the end of August, based on our understanding). An extension to the end of August 2023 would cost $40 billion, bringing the total cost of the pause to $195 billion.
Recent reports suggest the Biden Administration plans to once again extend the federal student loan payment moratorium – currently set to expire on December 31, 2022 – in light of court rulings against the Administration’s unilateral student debt cancellation plan. As we’ve shown several times before, extending the pause is costly, inflationary, regressive, and economically unjustified.
The pause costs over $5 billion per month and extending it through the end of 2024 would cost at least $120 billion. This would bring the total cost since Spring of 2020 to $275 billion. This represents about 70 percent of the cost of the President’s announced debt cancellation plan and is higher than the ten-year cost of President Biden’s proposal to double the maximum Pell Grant by 2029.Committee for a Responsible Federal Budget