NAVI - Biden student loan forgiveness program to cost over $400B CBO says

• The Congressional Budget Office estimated on Monday that President Biden's executive action to cancel $10,000 of student loans per borrower will cost the government ~$400B.
• The cost of suspended payments, interest accrual and involuntary collections from September 2022 to December 2022 will increase the cost of outstanding student loans by an additional $20B, the CBO estimated.
• The $400B estimates the present value as a result of cancelling the debt issued on or before June 30, 2022.
• Last month, Biden announced his plan to forgive $10K of student debt for borrowers who earn less than $125K per year. Pell Grant recipients will get an additional $10K of loans held by the Department of Education forgiven .
• Since then, Navient ( NASDAQ: NAVI ) and Nelnet ( NYSE: NNI ) shares have dipped . Credit Suisse has estimated that Navient will be hurt more than Nelnet by the program.
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