Forgiving $10,000 in student debt could cost the U.S. $300 billion

The Biden administration is expected to announce this week whether to extend a freeze on student federal loan payments, and possibly even forgive some college debt for millions of Americans. 

The plan under consideration by White House officials would cancel up to $10,000 in student loans per borrower, although that would likely be limited to those with annual income of no more than $125,000. People who earn above that threshold wouldn't qualify for forgiveness. 

Now, a new analysis estimates the total cost of forgiving that debt: almost $300 billion in the first year, according to the Penn Wharton Budget Model, a group of economists and data scientists at the University of Pennsylvania who analyze public policy to assess their economic and fiscal impact.