Biden student loan handout is 'economically responsible,' White House press secretary says

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White House Press Secretary Karine Jean-Pierre said during a press conference on Wednesday that President Biden's student loan handout of up to $20,000 in  for some Americans is "economically responsible."

"Taken together, the actions the president announced today are not only economically responsible, they will provide real benefits to families," Jean-Pierre said.

Biden announced on Wednesday the handout that will wipe away $10,000 of federal student loan debt for some borrowers who make less than $125,000 per year, adding that borrowers who were Pell Grant recipients may receive handouts of up to $20,000.

Student loan payments will also be paused until December 31, 2022, with payments set to resume in January 2023.

BIDEN SAYS RESUMING STUDENT LOAN PAYMENTS WILL PREVENT HANDOUT FROM HAVING A 'MEANINGFUL IMPACT ON INFLATION'

White House Press Secretary Karine Jean-Pierre holds the daily press briefing at the White House in Washington, U.S. May 26, 2022.  (Reuters/Jonathan Ernst)

Payments on student loans have been suspended since the beginning of the pandemic in 2020.

Biden said during remarks that he is providing "targeted relief" and said that it is an "economically responsible course."

"As a consequence, about $50 billion a year will start coming back into the Treasury because of the resumption of debt," Biden said. 

BIDEN ANNOUNCES STUDENT LOAN HANDOUT AS NATIONAL DEBT SOARS

US President Joe Biden announces student loan relief with Education Secretary Miguel Cardona (R) on August 24, 2022 in the Roosevelt Room of the White House in Washington, DC. (Olivier DoulieryAFP via Getty Images)

He added that experts "agree that these actions taken together will provide real benefits for families without meaningful effect on inflation."

The Penn Wharton Budget Model projects that Biden's $10,000 student loan handout for borrowers who have a yearly income of less than $125,000 will cost taxpayers around $300 billion.

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U.S. President Joe Biden greets people on South Lawn after arriving on Marine One from a trip to Delaware at the White House in Washington, U.S., August 24, 2022. (Reuters/Leah Millis)

Borrowers who have undergraduate student loans can "cap repayment at 5% of your monthly income," Biden said.

Jason Furman, economic adviser to Biden's ex-boss former President Barack Obama, disagreed with the White House's stance. 

Furman went on a lengthy Twitter rant on Wednesday afternoon ripping Biden’s student loan handout as "inflationary," "reckless," and government overreach.

"Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless," tweeted Furman, who served as chairman of the president’s Council of Economic Advisers during the Obama-Biden administration. "Doing it while going well beyond one campaign promise ($10K of student loan relief) and breaking another (all proposals paid for) is even worse."

Fox News' Brooke Singman and Jessica Chasmar contributed to this report.