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President Biden’s plan to cancel student debt and modify payments for millions of Americans could cost as much as $1 trillion, according to budget analysts, challenging the administration’s efforts to scale down the federal deficit.⁠ ⁠ Analysts expect strong interest in both debt cancellation and in programs that allow borrowers to pay a lower percentage of their income to keep up with their loans. The expected popularity of the policy could drive up costs and raise questions about whether the expense can be offset by other Biden administration policies, as the White House says.⁠ ⁠ The total price tag for the program could reach $1 trillion, according to the Penn Wharton Budget Model, a widely regarded analysis frequently cited by policy makers. Other analysts say the total bill could be nearly $500 billion, a range that shows the uncertainty and complexity of projecting the student-loan portfolio’s performance.⁠ ⁠ The White House hasn’t released comparable estimates of the policy’s total cost, though it said the debt-cancellation portion of the plan alone would reduce revenue the government receives from student-loan payments by about $240 billion over a decade.⁠ ⁠ The White House hasn’t proposed to raise taxes or other forms of revenue to offset the cost of the student-loan programs, but it says the debt-forgiveness portion is paid for through the reduction in the federal deficit that has occurred this fiscal year. The Biden administration has touted recent deficit reduction as an economic achievement and part of its strategy to counter inflation.⁠ ⁠ Some analysts say the student-loan programs move the federal budget in the other direction.⁠ “This action by the president will make the deficit bigger than it would be otherwise,” said Douglas Elmendorf, who served as director of the nonpartisan Congressional Budget Office during the Obama administration.⁠ ⁠ Read more at the link in our bio.⁠ ⁠ Photo: Shawn Thew/Shutterstock