“CBO recently estimated that whereas loans issued in the direct loan program between 2010 and 2020 would reduce the deficit by a total of $68 billion under FCRA accounting, those loans would increase the deficit by $52 billion on a fair value basis,” reads the March 2010 CBO study, Policy Options for Federal Student Loan Programs.( See p. IX of the Summary.)
The CBO report further notes that it explained its calculations about the budgetary impact of the administration's plan to change the federal student loan programs and the $52-billion addition to the deficit in a March 15 letter sent to Sen. Judd Gregg (R-N.H.), the ranking member of the Senate Budget Committee.
In the study, the CBO explains how the accounting mandated through the Federal Credit Reform Act (FCRA) is the standard procedure used to record the budgetary costs of the government’s direct and guaranteed loan programs.
However, the CBO notes that FCRA cost estimates exclude the value of “market risks” and the loan programs’ “administrative expenses” while the CBO’s “fair value” estimates takes them into account.
This discrepancy between the two estimates results in the FCRA figure being a less “comprehensive” appraisal of the true cost to taxpayers of the federal government’s direct student loan program, according to the CBO report.
5 comments:
Why would we want our government to control student loans?
Why did our government have to pass this as part of the Health Care Legislation?
Were they trying to keep it a secret so there could be no debate?
Where is the transparency?
These people behave as if we serve them - not the other way around.
Funny how the right wing propoganda machine promotes the numbers from the CBO when it is favorable to their cause and trash tha CBO when it doesn't. Can't have it both ways.
and how much would we have lost by sticking to the current system?
Funny how the left wing propoganda machine promotes the number from the CBO when it is favorable to their cause and when history shows that all gov't entitlement programs far exceed their estimated expense costs.
That's all part of Obamas plan he wants to put us in DEPRESSION not RECESSION right now I give him A+ for his work so far he will succeed
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