Report: Income-Driven Repayment Changes Estimated to Cost $333B
Katherine Knott
January 31, 2023
The Biden administration’s proposed changes to income-driven repayment would cost $333 to $361 billion over the next 10 years, economists at the Penn Wharton Budget Model found.
The estimate is more than double what the Education Department said the plan would cost. The department said the plan would have a net budget impact of $137.9 billion over the next 10 years, assuming that the administration would be able to forgive up to $20,000 in student loans for eligible Americans and that the volume or quantity of loans issued wouldn’t change.
The Penn Wharton Budget Model, which is a nonpartisan research organization at the Wharton School of the University of Pennsylvania that provides economic analysis of the fiscal impact of public policy, reached a similar estimate—$140 billion—using the department’s assumptions.
