The U.S. budget deficit has surged to $1.9 trillion for the first 11 months of the 2024 fiscal year, according to Treasury Department data released on Thursday. This marks a 24% increase compared to the same period in 2023, driven by rising interest costs and a significant adjustment from the student loan forgiveness program that was struck down by the Supreme Court.

In August alone, the deficit was $380 billion, in stark contrast to a surplus during the same month last year. The budget gap for the year has been exacerbated by a $319 billion accounting reversal from President Biden’s student loan forgiveness plan, which inflated the overall deficit. Treasury officials reported that the federal government has now spent over $1 trillion in interest payments, up 30% from last year.

Receipts for the fiscal year rose by 11% to $4.39 trillion, but federal outlays increased by 14%, reaching $6.29 trillion. This increase was driven by higher costs for Social Security, Medicare, and defense programs. The overall deficit, now at $1.897 trillion, is on track to be one of the largest outside of the COVID-19 pandemic era.

Treasury officials noted that the higher interest outlays reflect both rising rates and an increase in the overall national debt, which now exceeds $35 trillion. August’s receipts reached $307 billion, while outlays were $687 billion—more than double last year’s figures, largely due to the absence of last year’s student loan forgiveness reversal.

As the fiscal year nears its end on September 30, the deficit is expected to reach the Congressional Budget Office’s projected total of $1.9 trillion. The growing debt and rising interest costs could have significant implications for future U.S. fiscal policies, particularly as the Federal Reserve maintains its elevated interest rates.

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