While the Fed is hammering the economy with interest rate hikes to “stop inflation” by sending us deeper into a recession and creating unemployment, the Biden administration continues to spend money like drunken sailors. That includes the illegal student loan bailout.
Ever since the wealth transfer program from taxpayers to Biden’s base of MA activists was announced, the White House kept changing the numbers. And it’s still at it.
In a news release on Thursday evening, the Education Department issued its own estimate of the program’s cost: $30 billion a year over 10 years, with a total of $379 billion over the life of the program. White House officials had said in August it would cost around $24 billion per year.
$24 billion vs $30 billion is a sizable difference. But it’s all in how you juggle the numbers.
In August, officials offered a partial estimate of the cost that was based on 75 percent of eligible borrowers seeking forgiveness, suggesting that the administration thinks millions of eligible people may never take the government up on the offer.
Bharat Ramamurti, a deputy director of the National Economic Council, told reporters in a White House briefing that the 75 percent figure was “in line with the takeup rate of the most similar Education Department initiative that we could find.”
“We are hoping to get as close to 100 percent as possible,” he said. “But we — you know, for the purposes of putting out a preliminary estimate on this, we had to choose a number. And we felt like 75 percent was the most defensible.”
The Dept of Ed however claims that it’ll be 81%.
Department officials estimate that some 81 percent of eligible borrowers might apply for relief.
75% or 81%. What’s the difference when we’re making up numbers anyway?
The Ed numbers assume 27 million borrowers will apply. The Biden administration says that 40 million are eligible. The number has since gone up to 43 million.
But it depends on whom you ask.
The nonprofit Committee for a Responsible Federal Budget estimated this week that the plan would cost much more: $440 to $600 billion over the next ten years, when including the extended pandemic repayment pause and reforms to income-driven payment plan requirements.
About 20 million borrowers are expected to have their debt completely wiped out, while another 21 million will see their balance shrink, according to CRFB estimates.
There’s a massive difference between 27 million and 43 million.
As with most government spending programs, assume that the numbers will be much worse than any of the estimates.