Federal Student Loan Program Cost Underestimated by $311B, Government Watchdog Says
30th July 2022
The Education Department vastly underestimated the cost of the federal student loan program and will likely lose $197 billion on loans it issued over the past 25 years, according to a Government Accountability Report released on Friday.
The federal watchdog said that from 1997 to 2021, the department estimated the student loan program would generate about $114 billion, when in fact it was actually losing billions because of revised assumptions about borrowers and repayments, pandemic-related policy changes that affected the program and the expansion of a popular plan that tied repayments to a borrower’s income.
The department’s calculations were off by roughly $311 billion.