President Joe Biden speaks on Earth Day at Seward Park in Seattle, Washington, on April 22, 2022.
MANDEL NGAN/AFP via Getty Images
A government watchdog said the COVID-19 student loan pause cost the US $102 billion.
It came as Biden mulled debt forgiveness, with a decision expected at the end of August.
The loans, once expected to generate billions, have instead ended up as a huge cost.
The decision to pause federal student-loan repayments during the COVID-19 pandemic cost around $102 billion, a new government reported estimated.
It came as student debt continued to be a huge political issue, with President Joe Biden considering wide-ranging debt forgiveness.
The Government Accountability Office (GAO) assigned the cost to the decision to pause repayments in light of the COVID-19 pandemic.
The policy was put in place by President Donald Trump and continued by Biden. Per the GAO, it was a major factor in a long-term downturn in the fortunes of the Department of Educations’ Direct Loan program.
In the late 1990s, that program was predicted to generate $114 billion for the government via interest payments over a 25-year period.
Instead, the program is now estimated to cost $197 billion of the fiscal year of 2021, the GAO said.
That £311 billion increase in cost estimate has been attributed to factors including material changes to the loan system and new methods of estimating costs.
The repayment pause during the pandemic, due to expire on August 31, loomed large among them.
Since the CARES Act of March 2020, many borrowers have not made repayments, and interest has not accrued on their accounts.
The July 28 report came a month as Biden was expected to announce a decision on the much-discussed issue of student debt forgiveness — an issue that animated his campaign for the presidency.
He has consistently advocated for canceling up to $10,000, and last week White House Press Secretary Karine Jean-Pierre confirmed that he would come to a decision by the end of August.
He has been under pressure from progressive figures in the party — such as Rep. Alexandria Ocasio-Cortez and Sen. Elizabeth Warren — to increase that figure. Warren has pushed for $50,000 in debt forgiveness, something Biden said in late April he would not do.
Meanwhile, Republicans have become increasingly vocal in opposing the move.