Analysis of President Biden’s New Plans for Student Loan Debt Relief – April 2024

 From the Penn Wharton Budget Model.

"Summary: We estimate that President Biden’s recently announced “New Plans” to provide relief to student borrowers will cost $84 billion, in addition to the $475 billion that we previously estimated for President Biden’s SAVE plan. Moreover, some debt relief in the New Plans accrues to borrowers in households with income more than the SAVE plan coverage.

Key Points

President Biden recently announced five main provisions to provide student loan debt relief. Some of provisions are already mostly covered by President Biden’s SAVE plan introduced in 2023. Some provisions, however, are more incremental to the SAVE plan, including one provision---the forgiveness of longer-term debt---that expands eligibility to higher-income households.

We estimate that the New Plans will cost $84 billion in addition to the $475 billion that we estimated for President Biden’s SAVE plan, for a total cost of about $559 billion across both plans.

While the New Plans, like the SAVE plan, contain provisions to relieve debt based on individual or household income, the New Plans will also relieve some longer-term student debt for about 750,000 households making over $312,000 in average household income. The main reason for this high average household income is that the SAVE plan already provides long-term debt relief to households with lower incomes."