Legislators ask for more information about the impact of federal student lending on taxpayers.
05/02/2022 12:30 P.M.
2 minute read
As debate and discussion about student loan forgiveness continue on Capitol Hill,
a group of House Republicans is seeking updates from the Congressional Budget Office (CBO) on the estimated cost of the federal student lending programs.
The CBO is a nonpartisan agency that determines cost estimates for proposed legislation.
The House Republicans, led by U.S. Rep. Warren Davidson, R-Ohio, are asking the CBO to revisit its report on the Healthcare and Reconciliation Act, which included a federally-backed student loan program estimated to save taxpayers money, according to Fox Business.
“CBO miscalculated the cost of the Healthcare and Reconciliation Act by $503 billion, before factoring in President Biden’s student loan bailouts,” the Republicans wrote in a letter to the CBO. “Congress may not have passed this bill had CBO appropriately scored it. Congress needs an updated, accurate and transparent estimate from CBO so it can fix our student lending programs going forward.”
In the years since the Healthcare and Reconciliation Act was passed, different cost estimates on taxpayer savings in the student loan program have surfaced.
“In March 2010, the CBO estimated the federal student lending program would save taxpayers $40 to $62 billion from 2010 through 2020. In May of 2019, the CBO produced a new projection that showed the program would cost taxpayers $31.5 billion over the next decade, but an internal analysis by the Department of Education in 2020 determined taxpayers would be left with the significant expense of $435 billion,” according to a news release from Davidson’s office.
As a result, Davidson and about a dozen other House Republicans are asking the CBO to revisit what caused the change in cost to taxpayers and to provide updated estimates.
Biden has also told members of Congress “he’s looking at options to forgive student loans through executive action,” according to the Fox Business report.
Meanwhile, in other student loan news:
- The U.S. Department of Education is taking “immediate corrective actions” for public service loan and income-driven repayment (IDR) forgiveness. Read more here.
- The White House has extended student loan payment and interest relief through Aug. 31. Read more here.
- Questions remain about how much these actions would help borrowers and the economy, and what some of the other unintended consequences might be, ACA International previously reported.
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