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1 Phillip L. Swagel, Costs of Suspending Student Loan Payments and Canceling Debt 1 (September 26, 2022)

handle is hein.congrec/csosgst0001 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE Phillip L. Swagel, Director U.S. Congress Washington, DC 20515 September 26, 2022 Honorable Richard Burr Honorable Virginia Foxx Ranking Member Ranking Member Committee on Health, Education, Committee on Education Labor, and Pensions and Labor United States Senate U.S. House of Representatives Washington, DC 20510 Washington, DC 20515 Re: Costs of Suspending Student Loan Payments and Canceling Debt Dear Members of Congress: This letter responds to some questions you asked about the effects of President Biden's August 24, 2022, announcement on executive actions affecting student loans. The cost of outstanding student loans will increase by $20 billion because an action suspended payments, interest accrual, and involuntary collections from September 2022 to December 2022, the Congressional Budget Office estimates. That present-value cost is relative to the amounts in CBO's May 2022 baseline projections.' After accounting for those suspensions, CBO estimates that the cost of student loans will increase by about an additional $400 billion in present value as a result of the action canceling up to $10,000 of debt issued on or before June 30, 2022, for borrowers with income below specified limits and an additional $10,000 for such borrowers who also received at least one Pell grant. CBO continues to analyze the executive actions and will publish additional estimates as soon as they are completed. The estimates presented here do not include any effects of the actions affecting income-driven repayment plans, any other changes in loan terms, or effects on loans issued after June 30, 2022. The present values of expected reductions of cash inflows to the Treasury are calculated by discounting those flows as specified by the Federal Credit Reform Act (FCRA).2 They rely on information available as of today about www.cbo.gov

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