Michael Murphy: Biden's student debt 'cancellation' defies sense, drives deficit

Michael Murphy is the chief of staff and director of the Committee for a Responsible Federal Budget's FixUs initiative. He recently wrote an opinion piece for the Detroit News, an excerpt of which is below. 

The ink is barely dry on the President signing the Inflation Reduction Act, legislation that would achieve an estimated $250 billion in deficit reduction over the next 10 years. The savings from this legislation represented the most significant deficit reduction in over a decade. Yet unfortunately with another stroke of his pen just eight days later, the President has wiped it all away through his executive actions on student debt.

Read the entire piece here.

Published works by members or staff of the Committee for a Responsible Federal Budget do not necessarily reflect the views of all members or staff of the Committee. 

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Recent Student Loan Actions Forgo $5 Billion in Repayments

The Department of Education announced last week a six-month extension of automatic forbearance to all borrowers enrolled in the SAVE income-driven repayment plan while it is being challenged in courts, adding that they will forgive any unpaid accrued interest during that time. We estimate that the Department of Education is forgoing roughly $500 million of repayments per month, meaning that this extension would result in $3 billion in forgone payments, bringing the total amount up to $5 billion. Importantly, much of those payments will instead be paid later, and so the net cost would be some fraction of that $5 billion.

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