Posted on 08/07/2022 3:04:00 PM PDT by Twotone
The U.S. Department of Education is expected to lose close to $200 billion from federal student loans made over the last 25 years, due in part to pandemic-era relief pausing the bills for borrowers.
Originally, the Education Department estimated these loans would generate around $114 billion in income; they will, however, actually cost the federal government $197 billion, according to the Government Accountability Office, a federal watchdog.
A large share of the additional costs stem from the Covid pandemic-era pause on most federal student loan payments first enacted under the Trump administration and then continued by President Joe Biden. As a result, most federal student loan borrowers haven’t made a payment on their debt in more than two years, and interest hasn’t accrued on their balances in the meantime.
Given that policy, higher education expert Mark Kantrowitz said, the GAO’s findings were far from surprising.
“There have been several changes to the federal student loan programs, including the payment pause and interest waiver, that have increased the cost of the program, swinging it from a profit to a loss,” Kantrowitz said.
The other changes to the federal student loan system that are likely to increase costs include the suspension of collection activity, another pandemic-related relief measure, and revised estimates to how much borrowers will pay down their debts.
(Excerpt) Read more at cnbc.com ...
CBO numbers? Close enough.
missed the mark by $300 billion.
that would mean something to most people.
I’m sure the loss is much higher. Especially after they finally forgive all the loans, which they’re going to do one way or another.
Don’t you just love those “out year” results that are always wrong by billions?
But who’s counting? Unlike in enterprises that utilize capital and generate a positive return on it, no one in government is held accountable for producing anything.
The overriding priority in government employment is to appear to “do something”, while harassing law abiding ordinary people and creating loopholes for the mega-wealthy, and otherwise doing as little as possible.
Congress recklessly spends money adding to the unsustainable deficits. Congress walks away from any reasonable plan to repay the deficit and expects the taxpayers to deal with it.
Student recklessly borrow money to party and obtain degrees which will not provide sufficient money to repay the loans. Acting like Congress, they expect the taxpayer to cover their foolish conduct.
Women getting worthless degrees, or shortly after finishing they decide to stop working. Looking for a dude who’ll cover their debt. Then they bail on him because “they just don’t feel the same anymore”.
Don’t forget subsidizing criminals and bums.
‘A billion here, a billion there. Soon it will add up to real money.”
5.56mm
‘they expect the taxpayer to cover their foolish conduct.’
Actually not tax payers but the more inclusive everyone in the form of 20% inflation and 18% interest rates.
Don’t forget about the free money that is given to foreign students and illegals.
OBAMA in 2010 signed the bill that let has left the entire program initiated in 1965 on the taxpayers doorstep.
Hi guy.
I hope you are doing well.
Do you remember who said that quote?
A senator from IL I believe.
5.56mm
And CREATING mega wealthy people, like Cary Catz who became a billionaire ‘administrating’ the student loans.
No problem, the Feds will just print twice that and send it to Ukraine ...
The Government has LOST Hundreds of Billions on Dollars?
WHAT ever will we DO????
I mean - This has never happened before!!! EVER!!!
/s
The student loan problem hasn’t been solved by reasonable measures, such as bankruptcy discharge or returning to a reasonable statute of limitations, because the ruling elites consider it a loss of revenue. They have never gotten their revenue projections from student loans correct because it flows from a false premise, and therefore refuse to address the problem: higher education for all doesn’t work, and government loans just made the problem work.
One reasonable solution is a political deal to forgive some student loans in exchange for abolishing the U.S. Dept. of Education, and ending the student loan program. That needs to be discussed. I would like to see President Trump, who prides himself on the art of the deal, make that deal and eat the Dems political lunch before November, as they will remember Slow Joe’s promise to forgive $10,000 in student loan debt for all regardless of circumstances or need.
“ The Government has LOST Hundreds of Billions on Dollars?”
DeBlasio heard that and said, “hold my beer.”
Why pay when you know the vegetable in chiefs’ controllers will cancel the debt just before the midterms?
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