The Government Accountability Office recently published a report stating that federally issued Direct Student Loans placed in Income-Driven Repayment plans will cost the government $74 billion, which is higher than previously estimated.
According to the GAO, as of June of this year, 5.3 million student loan borrowers are repaying their loans in IDR plans. This means 5.3 million borrowers are repaying their loans with smaller monthly payments, thereby extending the time in which they will actually repay the entirety of these loans. All the while, loan interest continues to accrue, holding borrowers underwater even longer. Couple this with the usage of Public Service Loan Forgiveness, and other forgiveness programs, it is clear the federal government, and the taxpayers backing these loans, will never see the money it has lent.
