White House / Public Domain

Concerning how they intend to pay for the cancellation of between $10,000 and $20,000 in student debt for millions of Americans, President Biden and White House officials remain mute. Administration officials have yet to explain how Biden’s student debt handout will be paid for in the long run, despite announcing the proposal last week. According to economists, since the proposal asks for the government to completely cancel the lending, taxpayers will probably be responsible for paying the principle and interest when they are added to the approximately $31 trillion in existing U.S. debt.

As Fox News reports:

“If this ends up being added to the national debt, it’s just going to drive up the interest costs needed to not default on that figure,” said Brian Riedl, a senior fellow in economics at the center-right Manhattan Institute. “All of that is eventually going to drive up taxes because at some point you’ll have to figure out a way to pay that debt.”

Fox News Digital has reached out to the White House multiple times about how it plans to pay for the student loan handout or if future tax hikes will be needed. Administration officials have yet to provide an explanation but say the handout is “fully paid for” through deficit reduction that is occurring separately from the new handout. The deficit reduction is occurring after trillions in temporary federal spending to combat COVID-19.

“It is paid for and far more by the amount of deficit reduction that we’re already on track for this year,” said Bharat Ramamurti, the deputy director of the National Economic Council. “Like I said, we’re on track for $1.7 trillion in deficit reduction this year. That means, practically speaking, compared to the previous year, 1.7 trillion more dollars are coming into the Treasury than are going out. And we’re using a portion of that — a very small portion of it — to provide relief to middle-class families, consistent with the president’s plan.”

Biden announced last week plans to forgive $10,000 in student debt for borrowers making less than $125,000 annually. Pell Grant recipients will receive $20,000 in debt handouts, provided their income is below the $125,000 threshold. Administration officials claim that no individual or household in the top 5% of earners will benefit from the decision.

Additionally, the White House has decided to postpone student loan payments until the end of the year. A new Education Department proposal that permits borrowers to cap undergraduate loan payback at 5% of their monthly income coincides with the announcement, raising the cost of the handout to taxpayers. Biden’s student loan giveaway, according to administration officials, cannot be fully budgeted for because it remains unknown how many borrowers will choose to take advantage of the offer. It is still unknown how many people would have eventually paid back their debts in full without the loan forgiveness.


  1.  ‘Who Will Pay for Biden’s Massive Student Loan Gamble?’ It is going to be the taxpayer one way or the other.

  2. The Dims are just buying votes or trying . The most of the in office Dims do not care about Us and the USA .

  3. The democrats know that the most voters are the middle-class group, and they are the ones who are going to foot the bill, of course they are refusing to say (WE) the middleclass are going to struggle with it. The welfare precipitants can’t pay it, and the wealth know how not to, that leaves the middle class, that YOU and ME!

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