Student Debt Forgiveness to Cost Taxpayers $108B: Report

Government Accountability Office says that's how much will be forgiven in coming years
By Evann Gastaldo,  Newser Staff
Posted Dec 1, 2016 1:48 PM CST
Student Debt Forgiveness to Cost Taxpayers $108B: Report
In this Oct. 6, 2011, file photo, Gan Golan, of Los Angeles, dressed as the "Master of Degrees," holds a ball and chain representing his college loan debt, during Occupy DC activities in Washington.   (AP Photo/Jacquelyn Martin, File)

(Newser) – A new report out of the Government Accountability Office reveals that the federal government will forgive at least $108 billion in student loan debt in the coming years, a higher amount than official estimates out of the federal government's Education Department, the Washington Post reports. The GAO report, which Inside Higher Ed says is "highly critical," looked at the federal government's income-driven repayment plans, which cap borrowers' monthly payments based on their income and, in some cases, ultimately forgive the balance of the debt entirely. Currently, $355 billion is owed under income-driven repayment plans, and the GAO report found that $137 billion of that will never be repaid.

Of that, $108 billion will be forgiven under the terms of the plans, and $29 billion will be written off due to disability or death. Those amounts only cover loans made through the current school year, the Wall Street Journal reports. Income-driven repayment plans were passed by Congress in the 1990s and 2000s, but the Obama administration beefed some of them up and increased efforts to enroll people in them; currently 5.3 million borrowers are enrolled. The GAO report could offer ammunition to congressional Republicans looking to trim such programs in an attempt to rein in costs. "Really what the GAO is saying is that the Obama administration’s expansion of this program has been done without good information about the effects," says one higher-ed finance expert. (Read more student debt stories.)

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