President Joe Biden's federal student debt forgiveness plan, which would cancel up to $20,000 for low- and middle-income borrowers, could cost $400 billion, a new Congressional Budget Office (CBO) report shows.
Bowing to pressure from the progressive wing of his party, Biden announced the forgiveness plan in August.
According to CNN, no student loans have been forgiven yet and the Department of Education plans to release an application for the program in October.
The CBO performs nonpartisan analysis for Congress and cautioned in the report that the estimates are "highly uncertain."
Expected to release its own estimate of Biden's plan in the coming weeks, the White House previously said the debt forgiveness plan would decrease cash flow by approximately $24 billion the first year.
Under the president's plan, individuals who made less than $125,000 in 2020 or 2021 and married couples or heads or households who made less than $250,000 per year in those years are eligible to have up to $10,000 of their federal student loans erased.
Qualifying borrowers who also received federal Pell grants while in college are eligible for up to $20,000 in debt cancellation, according to CNN. Millions of low-income students are awarded Pell grants each year, based on factors such as family size and income and tuition cost at their school. These students are also more likely to struggle to repay their student loans and more likely to default.
Democrat lawmakers have been pushing Biden to cancel up to $50,000 per borrower in federal student loan debt since he took office. Though his plan will wipe out less than they asked for, key Democrats commended the move.
Senate Majority Leader Chuck Schumer and Massachusetts Sen. Elizabeth Warren called Biden's student loan action "transformative" for the middle class, in a joint statement Monday.
"Today's CBO estimate makes clear that millions of middle class Americans have more breathing room thanks to President Biden's historic decision to cancel student debt," the Democrat senators said.
Republicans, however, have blasted Biden's student debt cancellation as an unfair freebie that forces the working class to foot the bill for people who went to college.
"CBO's $400 billion cost estimate shows this administration has lost all sense of fiscal responsibility," North Carolina Rep. Virginia Foxx, said in a statement Monday. Foxx serves as the Republican leader on the House Education and Labor Committee.