Supreme Court's student loan decision will lower US deficit according to new White House projection
The Supreme Court ruling that upended President Joe Biden’s plan to forgive student loan debt changed his budget math
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.The Supreme Court ruling that upended President Joe Biden's plan to forgive student loan debt changed his budget math, modestly lowering the projected deficit for this year, his budget office reported Friday.
The White House expects to pare back $259 billion in spending that otherwise would have gone to erasing student loans. This contributed to lowering expected red ink this year under Biden’s budget plans from $1.569 trillion to $1.543 trillion.
The Office of Management and Budget's Mid-Session Review represents the administration's first recalculations of the loan program since the court's June decision, which will affect millions of borrowers.
The court decision initially was expected to reduce the deficit by $400 billion. But a portion of that money will instead be used to pay for a smaller income-driven loan repayment program that goes into effect this summer, according to the report.
Millions of Americans with student loans will be able to enroll in the new SAVE repayment plan that offers some of the most lenient terms the government has ever offered borrowers.
Looking ahead to 2024, the report projects that inflation will continue to decline and the unemployment rate will average 3.8% for the rest of the year. Unemployment is expected to hit 4.4 % in 2024, then decline over the rest of the 10-year budget window to an annual average of 3.8%.
The new forecast comes as Federal Reserve Chair Jerome Powell earlier this week said staff economists no longer foresee a recession.
“There is clear evidence that the President’s economic plan — Bidenomics — is growing our economy from the middle out and bottom up, not the top down,” said Biden's budget director Shalanda Young in a statement accompanying the report.
The administration has been pushing “Bidenomics" as an approach that spurs economic growth through promoting domestic supply chains and favoring firms that use those supply chains through tax credits and other measures.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.