U.S Student Debt Relief to cost $300bn
The U.S. Supreme Court’s decision to strike down President Joe Biden’s student debt relief would claw back more than $300 billion in costs associated with the program that were recognized last year, marking a major reduction in this year’s deficit
The court ruled 6-3 on Friday that Biden’s unilateral decision to offer up to $10,000 to $20,000 in one-time student debt forgiveness to couples earning up to $250,000 had exceeded presidential legal authority to grant such relief without the consent of Congress.
The debt relief program had been blocked by the legal challenges that led to the Supreme Court’s decision.
The U.S. Treasury last year took a $430 billion charge against fiscal 2022 budget results to cover these costs, as well as an extension of the general COVID-19 moratorium on payments through the end of 2022.
The move had the effect of limiting a dramatic reduction in the fiscal 2022 deficit to $1.375 trillion from $2.775 trillion the prior year. The federal fiscal year ends on Sept. 30.
Without the advance recognition, the deficit would have fallen below $1 trillion as COVID relief programs ended and revenues surged.
Spokespersons for the Education and Treasury departments did not immediately respond to requests for comment.
Reuters/Hauwa Abu
