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27% of the Federal Government’s Assets Are Student Loans

By Jim Swift

“Congratulations” the Wall Street Journal wrote in late 2009. “You’re about to own $100 billion a year in student loans.” They weren’t kidding.

As part of Obamacare, Congress passed the Student Aid and Fiscal Responsibility Act or SAFRA, a revenue positive pay-for that made Obamacare’s budget impact less costly. The Journal called it a “takeover of the student-loan market.”

Fast forward six years to a report recently issued by Bureau of the Fiscal Service, a division of the Department of the Treasury. The Fiscal Service issues the Financial Report of the United States Government, and what they report for 2015 is as the Journal predicted:

Assets – “What We Own” As of September 30, 2015, the Government held about $3.2 trillion in assets, an increase of $164.5 billion (5.4 percent). The Government’s assets are comprised mostly of net loans receivable ($1.2 trillion) and net property, plant, and equipment ($893.9 billion). From Note 4, the Department of Education’s (Education’s) Federal Direct Student Loan Program accounted for $880.6 billion (72.4 percent) of total net loans receivable. Education’s direct student loan program receivables balances have more than doubled since FY 2011 largely due to increased direct loan disbursements, attributable to the continued effect of 2010 legislation requiring a transition for new loans from guaranteed student loans to full direct lending by Education.

To summarize, out of the government’s $3.2 trillion in assets, 37 percent of that ($1.2 trillion) are payments from loans, and 73 percent of those loans are student loans. Which means that 27 percent of the federal government’s assets are the face value of outstanding federal student loans.

Now, more than ever, the children are our future.

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