Barack Obama’s expansion of the student-loan repayment program, intended to help curb America’s $1.26 trillion pile of outstanding college debt, is proving a lot more costly.
In a 100-page report (pdf) released today, the Government Accountability Office said it’d forgive $108 billion in debt for the borrowers of government loans who have fulfilled their obligations under the Obama administration’s income-driven repayment plans. That number is much higher than what the US government originally expected.
Why the discrepancy? Part of it is that the number of borrowers enrolling in the plans has tripled in the last three years, forcing the government to spend more. It said almost 20% of direct-loan borrowers were “delinquent on their loan payments at the end of 2015, and more than a million borrowers defaulted on their loans over the 2015 fiscal year.”