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The Cost of Student Debt Cancelation: The State-By-State Impact on Taxpayers and Individuals Without a College Degree

 

By Demian Brady, National Taxpayers Union Foundation

The House passed H.J. Res. 45, a Congressional Review Act resolution to overturn the Biden administration’s student debt cancelation implemented through executive action without approval from Congress. The Senate is expected to consider the resolution soon.

The Biden debt cancelation plan is estimated to add $570.5 billion to the federal debt, based on the recent Congressional Budget Office (CBO) estimate in the Limit, Save, Grow Act. This figure includes the direct costs of the cancelation, the full cost of the income-driven repayment (IDR) changes (also set to be implemented through regulation rather than legislation), and interacting effects.

The Biden student loan plan would therefore be more costly than initially expected. When the plan was first announced last August, National Taxpayers Union Foundation estimated that it would cost$400 billion, or roughly $2,500 per taxpayer. With the revised CBO score, the loan cancelation and IDR now amounts to a cost per taxpayer of $3,526. 

We can also look at this another way. According to the latest data from the Census Bureau, there are 148.3 million individuals in the 50 states and the District of Columbia who are 25 years or older without a Bachelor’s degree or higher. The student debt cancelation will cost them $3,847 each.

NTUF recently reported on the cost per taxpayer and the cost per person without a bachelor’s degree for each congressional district. The table below breaks out the number of people eligible for loan cancelation in each state, as reported by the White House earlier this year, the number of people in each state who are 25 years or older and do not have a bachelor’s degree, and the impact per taxpayer in each state for the cost of the debt cancelation.

Conclusion

The projected expense associated with the debt cancelation and the proposed IDR initiative is significant. It is crucial to carefully evaluate the lasting effects of this policy, particularly in light of the Biden administration’s attempt to implement it through executive action as a means to bypass Congress.

State Number of People Eligible for Loan Cancelation Cost per State for Student Loans Canceled (in Billions) Number of People Age 25 Years and Older Without Bachelor’s or Higher Degree Number of Taxpayers Average Cost per Taxpayer for Loans Canceled in Each State
AK 38,000 $0.83 326,489 359,840 $2,306.58
AL 373,000 $8.10 2,504,442 2,216,040 $3,655.17
AR 222,000 $4.82 1,522,729 1,330,120 $3,623.73
AZ 496,000 $10.78 3,365,216 3,407,310 $3,163.79
CA 2,315,000 $50.29 17,172,052 19,409,370 $2,591.02
CO 471,000 $10.23 2,247,942 2,900,050 $3,527.53
CT 321,000 $6.97 1,466,705 1,843,480 $3,780.89
DC 72,000 $1.56 176,922 353,430 $4,413.89
DE 81,000 $1.76 457,812 510,050 $3,450.64
FL 1,598,000 $34.72 10,535,276 11,112,590 $3,124.38
GA 1,012,000 $21.99 4,729,195 5,010,990 $4,388.35
HI 74,000 $1.61 661,006 698,680 $2,304.35
IA 264,000 $5.74 1,484,519 1,538,520 $3,730.86
ID 126,000 $2.74 871,302 858,980 $3,189.83
IL 1,044,000 $22.68 5,488,118 6,249,990 $3,628.81
IN 542,000 $11.77 3,242,844 3,301,870 $3,564.65
KS 228,000 $4.95 1,254,681 1,393,230 $3,552.90
KY 362,000 $7.86 2,247,453 2,050,210 $3,833.75
LA 381,000 $8.28 2,292,817 2,051,380 $4,036.31
MA 593,000 $12.88 2,634,332 3,645,920 $3,532.72
MD 522,000 $11.34 2,455,058 3,114,470 $3,641.07
ME 116,000 $2.52 649,773 707,220 $3,563.25
MI 864,000 $18.77 4,763,725 4,989,060 $3,762.23
MN 507,000 $11.01 2,382,316 2,863,670 $3,844.72
MO 484,000 $10.51 2,885,991 2,977,760 $3,529.50
MS 248,000 $5.39 1,480,504 1,308,190 $4,120.20
MT 75,000 $1.63 499,938 551,550 $2,955.31
NC 812,000 $17.64 4,715,975 5,006,390 $3,523.50
ND 53,000 $1.15 345,892 373,490 $3,079.07
NE 154,000 $3.35 847,275 941,040 $3,559.89
NH 121,000 $2.63 602,503 737,650 $3,565.38
NJ 759,000 $16.49 3,683,781 4,701,650 $3,507.28
NM 125,000 $2.72 1,014,619 981,490 $2,771.30
NV 198,000 $4.30 1,588,200 1,584,810 $2,713.26
NY 1,549,000 $33.65 8,403,407 10,159,550 $3,312.15
OH 1,079,000 $23.44 5,624,063 5,846,440 $4,009.28
OK 270,000 $5.87 1,902,706 1,756,430 $3,342.01
OR 329,000 $7.15 1,929,574 2,070,740 $3,452.87
PA 1,157,000 $25.14 5,996,960 6,531,510 $3,849.03
RI 96,000 $2.09 491,138 576,050 $3,628.16
SC 442,000 $9.60 2,463,762 2,492,930 $3,850.89
SD 73,000 $1.59 403,431 443,150 $3,587.95
TN 517,000 $11.23 3,347,052 3,317,740 $3,384.83
TX 2,163,000 $46.99 12,858,251 13,594,150 $3,456.63
UT 191,000 $4.15 1,270,630 1,476,210 $2,811.25
VA 685,000 $14.88 3,458,212 4,211,060 $3,533.55
VT 52,000 $1.13 257,084 344,770 $3,277.55
WA 486,000 $10.56 3,296,487 3,815,190 $2,767.88
WI 465,000 $10.10 2,749,861 2,958,000 $3,414.47
WV 131,000 $2.85 960,251 803,760 $3,545.83
WY 30,000 $0.65 279,730 286,740 $2,266.86
US Total 26,260,000* $570.50 148,290,001 161,764,910 $3,526.72
Date Sources: White House, Census Bureau, Internal Revenue Service, and the Congressional Budget Office (CBO). The cost of student loans canceled in each state is calculated from the national average of $21,725.06 based on CBO’s total cost and the White House’s data on the number of people whose loans are eligible for cancelation.

* US total includes individuals in territories and in other locations.

 


Demian Brady is the Vice President of Research for the National Taxpayers Union Foundation.