The United States will soon start paying for college with borrowed money, which could put more pressure on the federal budget.
The new federal spending policy will begin this year and will likely add trillions to the national debt, according to the Center for Budget and Policy Priorities.
The Center said the $1.3 trillion in additional spending for college education over the next decade will be enough to finance about $1 trillion of debt over that period.
The Center estimates that the new federal policy will increase debt to about $17,000 per person by 2021, a significant increase from today’s levels of $12,000.
More than half of the new spending will go to states that have not had a robust economic recovery, including Louisiana, Georgia, Oklahoma and Mississippi.
The policy will also provide federal funds for the construction of 1.2 million student housing units and for scholarships for low-income students to attend community colleges.
The Obama administration says it is providing the money to help states “make college affordable and accessible for students, families and communities.”
The money will come from federal tax credits for low income families, the Federal Reserve’s monthly mortgage loan insurance program, and other sources.
“While it’s still too early to know how much each state will receive from this new program, we know that states that implement this policy will likely see an increase in students and families going to college,” Treasury Secretary Jacob Lew said in a statement.
There are more than 400,000 students enrolled in community colleges nationwide, according a 2012 report by the Council of Economic Advisers.
Students and families who are not in debt are paying about $2,000 a year in state and local taxes on student loan debt.
The government has estimated that it could cost the federal government $20 billion a year to make up for the lost revenue if students did not have to pay their student loans back.
The National Association of State Colleges and Universities, which represents community colleges, says the cost of college is expected to be around $4,500 per student, which is more than the average federal subsidy of about $6,300.
Many students who graduate from college with student loans are unable to afford to attend graduate school, meaning that their parents, or even siblings, are footing the bill for college, the report said.
The Federal Reserve says it can buy up to $1,500 of federal debt at a time, but it can also purchase the same amount of debt at higher rates.
Federal Reserve Chair Janet Yellen, a former member of President Barack Obama’s economic team, said that if the program were implemented, it could have a “direct effect” on the economy and would also have an effect on student debt.
President-elect Donald Trump has proposed eliminating the program.