(breitbart) – Joe Biden’s plan to cancel up to $20,000 in student loans will cost taxpayers an average more than $2,500 per year, according to the National Taxpayers Union Foundation.
The National Taxpayers Union Foundation estimates that debt cancelation could cost between $386 billion and $405 billion in net costs to taxpayers. That works out to an average per taxpayer of $2,503.22.
Others have put the price tag even higher. The Committee for a Responsible Federal Budget estimated that the Biden plan would likely cost around $500 billion. The libertarian Cato Institute has estimated that it would cost $427 billion.
“Accounting for the uneven distribution of tax burdens across different income levels, we estimate that low-income taxpayers making between $1 and $50,000 would bear an average burden of $190, while taxpayers making between $100,000 and $200,000 would bear an average burden of $3,790,” the National Taxpayers Union Foundation said.
Although framed as debt forgiveness, the Biden plan is more accurately a debt transfer program. The student loans being forgiven are owed to the federal government. The loss of revenue from those loans will be made up for by borrowing by the government.
“While taxpayers won’t feel that bite on this year’s tax bill, Congress will have to make up the difference through reduced spending elsewhere, higher taxes, or, most likely, increased borrowing. Assuming the latter, the federal government essentially just took out a $2,500 loan on the average taxpayer’s behalf, one that taxpayers will be paying interest on for some time,” Andrew Wilford, a policy analyst with the National Taxpayers Union Foundation, wrote in a recent op-ed.
Ultimately, the cost to taxpayers is likely to be even higher because the loan cancelation does nothing to address the underlying problems that have led to such high levels of student debt. According to the Committee for a Responsible Federal Budget, the total level of student debt will return to pre-cancelation levels by 2028. If students borrow more because they expect future forgiveness, that timeline could be even shorter.