Student Loans Worse Than Expected
September 23 | Posted by mrossol | Big Govt, Democrat Party, ObamaA sop to the voters…
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Sept. 19, 2014 6:24 p.m. ET
Recently we told you about a study from the New America Foundation showing how changes to the federal student-loan program will wreak fiscal havoc in the future. A new government report shows that Uncle Sam’s swelling loan portfolio is already threatening taxpayers.
The Congressional Budget Office has released its monthly budget review, with an update on federal revenues and spending for the first 11 months of fiscal year 2014, which ends Sept. 30. Chip Dickson at Discern Investment Analytics spotted the bad news inside: The net cost of student loans had increased by $20 billion. As a result, Department of Education outlays through August of this fiscal year rose to $58 billion from $38 billion in the same period of fiscal 2013.
To be clear, these numbers don’t reflect cash out the door. They reflect changing Administration estimates of the costs taxpayers ultimately will bear from loans made in prior years. While the 2013 revision signaled a better deal for taxpayers than anticipated, this year’s revision signals the opposite.
Our government sources say that a big contributor to the latest upward revision in taxpayer suffering is an unexpectedly large number of borrowers participating in Washington’s income-based repayment plans. These programs often allow borrowers to lower their monthly payments to 10% of discretionary income. When combined with the loan forgiveness program for those who work somewhere other than a profit-seeking business, they will constitute free graduate school for an increasing number of community organizers.
And if taxpayers thought educating these kids was expensive, wait until they see the costs these young “nonprofit” people can impose on society while working full-time.
Student Loans Worse Than Expected – WSJ.
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