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PPP loans cost nearly double what Biden's student debt forgiveness would have. Here's how the programs compare.

Reaction to SCOTUS student loan decision
What happens now? Student loan forgiveness plan struck down by Supreme Court 10:27

After the Supreme Court reversed President Biden's student-loan forgiveness plan, critics of the decision are pointing to other recent examples of the government forgiving debt —many with far larger amounts of money than at stake than in the student loan plan.

In particular, the Paycheck Protection Program has so far forgiven $757 billion in loans to private businesses, according to government databases — nearly double what the Biden administration's student-loan forgiveness would have cost. 

Mr. Biden made that comparison in a press conference on Friday afternoon, pointing out that many members of Congress received PPP loans that were forgiven. 

"I was trying to provide students with $10,000 to $20,000 in relief," Biden said. "The average amount forgiven in the PPP program was $70,000."

He added, "The hypocrisy is stunning."

How much in PPP loans was forgiven?

The government, through the Small Business Administration, gave out nearly $790 billion in PPP loans between March 2020 and May 2021, when the program ended, public records show. Of that amount, $757 billion has been forgiven. 

The recipients include two dozen members of Congress who received between $79,000 and $3.4 million apiece for businesses, according to reporting at the time. 

While the PPP did preserve up to 3 million jobs for one year, according to one study from economists at MIT and the Federal Reserve, the major beneficiaries of that money were business owners and shareholders —not workers. 

Between two-thirds and three-quarters of the PPP's benefits "did not go to paychecks, however, but instead accrued to business owners and shareholders," the study found, estimating that "about three-quarters of PPP benefits accrued to the top quintile of household income."

How much did the government spend on pandemic relief? 

The government also spent nearly $700 billion on enhanced unemployment benefits and $860 billion on direct payments in the form of stimulus checks, according to public data tracked by the Committee for a Responsible Federal Budget

How much would student loan forgiveness have cost?

The Department of Education relied on the 2003 HEROES Act as its legal justification for wiping out roughly $430 billion in debt, while the Biden student-debt relief plan would have cost as much as $519 billion over 10 years, according to an estimate from the Penn Wharton Budget Model, a nonpartisan group that examines the economic impact of public policies. 

About two-thirds of the benefit would have gone to households earning less than $88,000 a year, the group estimated.

Why was the PPP loan forgiveness program legal? 

The PPP program as well as the student loan forgiveness plan "were both programs that were established to address the impact of the national emergency," said Abby Shafroth, director of the Student Loan Borrower Assistance Project at the National Consumer Law Center. "Both programs recognized that the pandemic was enormously economically disruptive."  

However, the two programs rely on different laws. 

PPP was authorized as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March 2020. From the start, the loan program was designed to be fully or partially forgiven, as long as the businesses used the money for eligible expenses such as payroll.

"Embedded within the PPP was this idea that it could be forgiven from the very beginning," noted Chavis Jones, associate counsel in the educational opportunities project at the Lawyers' Committee for Civil Rights Under Law. 

The PPP loans never faced the same scrutiny — or legal challenges — as student debt relief, experts said. 

But, Shafroth noted, "As soon as the student loan program was announced, critics and opponents backed by billionaire organizations attacked the program and filed briefs in court challenging it," she said. 

Why was the student loan program struck down?

Student loan forgiveness, the Biden administration argued, was authorized under the HEROES Act, which Congress passed in the wake of the September 11 terrorist attacks and later expanded. 

Since 2003, the act held that the Secretary of Education could "waive or modify any statutory or regulatory provision" in the case of a national emergency. The Trump administration used this authority to pause student-interest loan repayments in 2020.

A lawsuit from six Republican-led states asked the Supreme Court to consider whether the Secretary of Education had the authority to forgive student loan debt under the HEROES Act. On Friday, the high court ruled that the law does not grant the secretary that authority.

Both the PPP and student debt relief "were created to remedy the economic harms during the pandemic," Jones said. "What we do know is the PPP loans disproportionately impact people of greater means, and we know the student debt relief program impacts those who are more economically vulnerable." 

He added, "Once again, people with lesser means and those who are economically vulnerable have taken a gut punch of sorts."

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