Biden student loan handout to cost more than $400 billion: CBO

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President Biden's move to cancel up to $10,000 in student loans for many borrowers — and up to $20,000 for others — will cost more than $400 billion, according to the nonpartisan Congressional Budget Office (CBO).

"CBO estimates that the cost of student loans will increase by about an additional $400 billion in present value as a result of the action canceling up to $10,000 of debt issued on or before June 30, 2022, for borrowers with income below specified limits and an additional $10,000 for such borrowers who also received at least one Pell grant," the CBO said in a letter released Monday. 

The analysis also said Biden's suspension of payments for other borrowers until the end of the year — made as part of the same action — will hit taxpayers too. 

"The cost of outstanding student loans will increase by $20 billion because an action suspended payments, interest accrual, and involuntary collections from September 2022 to December 2022," the CBO wrote. 

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Yearly costs from the student loan handout are likely to peak later this decade, according to the CBO analysis, and will continue to impact the deficit "over roughly the next 30 years."

Senate Health, Education, Labor and Pensions Committee Ranking Member Richard Burr, R-N.C., and House Education and Labor Committee Ranking Member Virginia Foxx, R-N.C., requested the analysis of the handout.

"CBO’s $400 billion cost estimate shows this administration has lost all sense of fiscal responsibility," Foxx said Monday. "Rather than working with Congress to bring down college costs, President Biden has opted to bury the American people under our unsustainable debt."

Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Elizabeth Warren, D-Mass., two of the loudest advocates for Biden's student loan forgiveness in Congress, said the CBO estimate only proves the policy is helping Americans. 

"Today’s CBO estimate makes clear that millions of middle class Americans have more breathing room thanks to President Biden’s historic decision to cancel student debt," they said. "President Biden delivered transformative middle class relief by cancelling student debt for working people who need it most — nearly 90% of relief dollars will go to those earning less than $75,000 a year."

The nonpartisan Congressional Budget Office says President Biden's move to cancel student loan debt for many borrowers will run taxpayers more than $400 billion.  (Drew Angerer/Getty Images)

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The CBO analysis comes after the White House earlier this year said the student loan handout would cost roughly $240 billion over 10 years. It tracks with some independent estimates, including the Committee for a Responsible Federal Budget (CRFB), which estimated it would run taxpayers approximately $500 billion.

The CRFB also included in its estimate about $120 billion in costs to taxpayers from another element of the Biden's executive order on "income-driven repayment," which the CBO said it excluded. 

The White House argued earlier this year that argue that the handout was "fully paid for" by other reductions in the deficit in 2022 as compared to previous years. 

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But the decrease in deficit in 2022 is largely a result of the massively high baseline set in 2020 and 2021, thanks to massive bipartisan COVID-19 spending and Democrats' party-line $1.9 trillion coronavirus bill. 

Fox News' Brie Stimson and Haris Alic contributed to this report.