Committee For a Accountable Federal Finances, How A lot Pupil Debt Has Already Been Cancelled?:
Although some policymakers proceed to suggest cancelling some, most, or all pupil debt, a substantial amount of pupil debt has already successfully been cancelled. General, we estimate the equal of $5,500 per borrower can have been cancelled by the scheduled finish of the coed mortgage fee pause on Might 1, at a value of greater than $100 billion. Extending the reimbursement pause additional will value a further $50 billion per yr, and policymakers ought to reject calls to take action.
Other than some focused cancellation by the present and former administrations, almost each borrower has benefited from curiosity cancellation throughout the present reimbursement moratorium whereas higher-than-expected inflation has eroded present balances. Nevertheless, that profit has been extremely uneven and considerably extra regressive than the already-regressive $10,000 across-the-board debt cancellation proposed by then-Presidential candidate Joe Biden throughout the 2020 marketing campaign.
For instance, we estimate a typical latest medical college graduate will successfully obtain almost $50,000 of debt cancellation, a latest regulation college graduate will get $30,000 of cancellation, and a latest grasp’s diploma recipient will get $13,500. On the similar time, a latest bachelor’s diploma recipient will get $4,500 of debt cancellation, somebody who simply accomplished an affiliate’s diploma will obtain $3,500, and an individual who was unable to finish their undergraduate diploma will get $2,000.
Though solely 7 p.c of debtors have over $100,000 of debt, their debt accounts for nearly 40 p.c of the quantity excellent within the mortgage portfolio. These with over $200,000 of debt account for two p.c of debtors and 17 p.c of the quantity excellent. …
Now we have repeatedly famous that across-the-board debt cancellation – even when restricted to $10,000 per particular person – is costly and regressive on prime of being poor financial and larger schooling coverage.
https://taxprof.typepad.com/taxprof_blog/2022/04/recent-law-grads-have-had-30000-of-their-student-loan-debt-cancelled.html
