The federal government is on track to forgive at least $108 billion in student debt in coming years, as more and more borrowers seek help in paying down their loans, leading to lower revenues for the nation’s program to finance higher education.
The Government Accountability Office disclosed the sum Wednesday in a report to Congress which for the first time projected the full costs of programs that set borrowers’ monthly payments as a share of their earnings and eventually forgive portions of their debt.
The GAO report also sharply criticized the government’s accounting methods for its $1.26 trillion student-loan portfolio, pointing to flaws that have led it to alter projected revenues significantly over the years. The government says it still expects the program to generate a profit over the long term, but it has repeatedly trimmed expectations for revenues.
Ted Mitchell, undersecretary at the Education Department, said such programs “are helping millions of borrowers successfully manage loan repayment, particularly those for whom standard repayment may prove challenging.”