Federal Government Makes $300 Billion Student Loan Accounting Error – And Not In Taxpayers’ Favor

When your budget is in the trillions of dollars, perhaps $300 billion is a rounding error. But to the American taxpayer footing the bill, losing $300 billion is a big deal.

A new study published by the GAO revealed a shocking gap between what the federal government projected the student loan program would generate in revenue and what actually happened.

The report goes on to say that the Department of Education initially estimated that the federal student loan program would generate $114 billion.

Projected Gains Turn into Huge Losses

It is a collection of federal subsidized and unsubsidized loans made to students and their parents to provide financial assistance.

What is the Direct Loan Program?

The GAO evaluated the Department of Education’s cost estimates over the years and found two main areas contributing to the massive shortfall.

What Accounts for the $300 Billion Discrepancy?

In other words, they misjudged people’s ability to repay their debt.

What Accounts for the $300 Billion Discrepancy?

Even with a recession looming, college tuition costs continue to rise at an average rate of 8% annually, far outpacing inflation and wage growth.

What Does the Future Hold?

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