DAY FOUR: White House refuses to say who will pay Biden’s $500,000,000,000 student loan

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The White House remains mum on how it plans to pay of President Biden decision whether to forgive between $10,000 and $20,000 in student debt for some Americans or whether future tax hikes will be needed to cover the proposal which, by some estimates, costs more than $500 billion.

Despite unveiling the policy earlier this week, administration officials have yet to say how the proposal will pay off in the long run. Given that the current plan asks the government to write off the debt, that means taxpayers are likely responsible for much of the principal and interest being dumped on top of the nearly $31 trillion in existing US debt. .

Fox News Digital again asked the administration how it plans to pay for the document.

The White House did not answer the question, nor was it considering future tax hikes to offset Biden’s student loan.

NEARLY 100 REPUBLICANS CALLING ON PELOSI TO HOLD BIDEN RESPONSIBLE FOR $500B STUDENT DEBT

Biden on Wednesday announced plans to forgive $10,000 in student debt for borrowers earning less than $125,000 a year.  (AP)

Biden on Wednesday announced plans to forgive $10,000 in student debt for borrowers earning less than $125,000 a year. (AP)
(AP Newsroom)

Administration officials, without explaining how the extra spending will be offset, have argued in recent days that the national deficit is already plunging on Biden’s watch.

“We’ve actually achieved $350 billion in deficit reduction, and this year we’re projecting, by the end of the fiscal year, $1.7 trillion in deficit reduction,” he said. White House Press Secretary Karine Jean-Pierre during the daily White House press briefing.

Administration officials have also said the cost of Biden’s student loan can’t be fully factored in because it’s unclear how many borrowers will choose to take advantage of the opportunity. They say it remains unclear how many people would have repaid the full amount of their loans over time anyway.

“All of this, in terms of costs, will also depend on the number of canceled loans that actually had to be repaid,” Jean-Pierre said.

DEMOCRATS OPPOSED TO BIDEN’S STUDENT LOAN DOCUMENT PREVIOUSLY BACKED SEPARATE DEBT CANCELLATION BILL

The National Taxpayers Union Foundation, however, disagrees. The group released an analysis earlier this week estimating that if the student loan adds nearly $330 billion to the deficit over the next decade, as a fiscal model of the Wharton School at the University of Pennsylvania of Business says the average cost per taxpayer will be $2,085. But it could be on the low end. Responsible Budget Committee put the cost of alms between 440 and 600 billion dollars.

The Conservative tax think tank, in particular, says the federal government will have to find a way in the future to make up for canceled loans, whether through spending cuts or tax hikes. Much of it, the group predicts, will be through the latter.

WASHINGTON, DC – AUGUST 25: Student borrowers hold a rally in front of the White House to celebrate President Biden's cancellation of student debt and to begin the fight to cancel any remaining debt on August 25, 2022 in Washington, DC.  (Photo by Paul Morigi/Getty Images for We 45m)

WASHINGTON, DC – AUGUST 25: Student borrowers hold a rally in front of the White House to celebrate President Biden’s cancellation of student debt and to begin the fight to cancel any remaining debt on August 25, 2022 in Washington, DC. (Photo by Paul Morigi/Getty Images for We 45m)
(Paul Morigi/Getty Images for We 45m)

When broken down, the data showed that the sum was significantly higher for higher income brackets, but was still earmarked for the middle class.

For example, according to the group, taxpayers earning between $1 and $50,000 annually would pay more than $158. The cost for those earning between $50,000 and $75,000 is estimated at $866 and $1,477 for those earning $75,000 and $100,000, while those earning between $100,000 and $200,000 should face costs in excess of $3,150. Earners pulling down $200,000 to $500,000 would pay close to $9,950.

“Some may dispute that taxpayers bear the cost of canceling student debt. But the $329 billion cost of canceling student debt would be $329 billion previously borrowed from the federal government and not returning to the Treasury”, indicates the analysis of the organization. “Policymakers will need to close this gap in the future with government spending cuts, tax increases, more borrowing, or some combination of these.”

Democrats argue the national deficit is already plunging on Biden's watch.  (Photo by Drew Angerer/Getty Images)

Democrats argue the national deficit is already plunging on Biden’s watch. (Photo by Drew Angerer/Getty Images)
(Photo by Drew Angerer/Getty Images)

Biden on Wednesday announced his intention to forgive $10,000 in student debt for borrowers earning less than $125,000 per year. Pell Grant recipients will receive $20,000 in debt repayment, provided their income is below the $125,000 threshold. Administration officials say no individual or household in the top 5% will benefit from the ruling.

The White House also extends a pause on student loan repayments until the end of the year. Coinciding with the announcement, a new Department for Education proposal allows borrowers to cap undergraduate loan repayment at 5% of their monthly income, raising the cost of aid for taxpayers.

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Penn Wharton’s budget model estimates that the total cost of the proposal, taking into account loan forbearance and the new repayment cap, could be over $1 trillion.

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