Biden student loan bailout plan to cost $475B over next decade, roughly $45B more than rejected plan: study

President Biden’s new income-driven repayment plan for student loans will cost $475 billion over 10 years, according to the Penn Wharton Budget Model, tens of billions of dollars more than an earlier plan that the Supreme Court struck down last month.

The Penn model estimates taxpayers will face $200 billion in costs due to payment reductions in the president’s Saving on a Valuable Education (SAVE) plan, as a little more than half of the $1.64 trillion in outstanding loans will be covered.

Another $275 billion in taxpayer costs will be attributable to payment reductions under the plan for $1.03 trillion in new student loans into the next decade.

According to the model’s estimate range, the cost of the Income-Driven Repayment (IDR) plan could be as low as $390.9 billion or soar as high as $558.8 billion.