On August 24, President Joe Biden announced that the Education Department would forgive between $10,000 and $20,000 in federal student loans for individuals making less than $125,000 a year and couples making less than $250,000. His plan also extends the student loan repayment moratorium to December 31, 2022, and lowers the minimum monthly payment for "income-driven repayment" (IDR) plans, and allows single borrowers making under 225 percent of the poverty line to owe no monthly minimum payment.
While this plan is far less generous than the universal forgiveness backed by Sen. Bernie Sanders (I–Vt.), it will still be costly to the public fisc in a way that we won't know for years. Why? Because the Department of Education has no idea how to project the costs of its own programs.
