{"id":1579492,"date":"2022-07-29T16:25:09","date_gmt":"2022-07-29T20:25:09","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1579492"},"modified":"2022-07-29T16:25:18","modified_gmt":"2022-07-29T20:25:18","slug":"a-math-error-cost-the-government-nearly-200-billion-on-student-loans-heres-how","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/a-math-error-cost-the-government-nearly-200-billion-on-student-loans-heres-how\/","title":{"rendered":"A Math Error Cost The Government Nearly $200 Billion On Student Loans. Here\u2019s How"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">28<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fa-math-error-cost-the-government-nearly-200-billion-on-student-loans-heres-how%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1579492&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><ul>\n<li><strong>The Department of Education (DOE) overestimated the revenue from the federal student loan program by almost $200 billion, according to a Government Accountability Office (GAO) report.<\/strong><\/li>\n<li><strong>The suspension of student loan payments cost an additional $100 billion, according to the GAO.<\/strong><\/li>\n<li><strong>With a combined $300 billion in unexpected costs, the GAO estimates that the DOE has lost almost $200 billion in the past 25 years.\u00a0<\/strong><\/li>\n<\/ul>\n<p>The Department of Education (DOE) severely miscalculated revenue from federal student loans, initially estimating a $110 billion profit, but the program has lost nearly $200 billion, according to a Government Accountability Office (GAO) report.<\/p>\n<p>The loss of more than $310 billion in projected earnings can be attributed to both a dramatic overestimate of the program\u2019s revenue at the outset, and changes to legislation governing the payment of student loans, according to the <a href=\"https:\/\/www.gao.gov\/assets\/gao-22-105365.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">GAO<\/a>.\u00a0 Of these losses, $189 billion can be attributed to the DOE simply overestimating the success of the loan program, as the program\u2019s data showed that assumptions regarding the popularity of payment plans, the expected income of debtors and chance of debtors to default were flawed. <strong><a href=\"https:\/\/dailycaller.com\/2022\/06\/28\/rick-scott-senate-republicans-introduce-legislation-bill-prevent-mass-cancellation-student-loan-debt\/\" target=\"_blank\" rel=\"noopener noreferrer\">(RELATED: EXCLUSIVE: Rick Scott, Senate Republicans Introduce Legislation To Prevent Mass Cancellation Of Student Loan Debt)<\/a><\/strong><\/p>\n<p>\u201cThese updates decreased borrowers\u2019 projected future income in Education\u2019s model to better match actual data, and lowered projected payments borrowers would make in [income-driven repayment] plans,\u201d Melissa Emrey-Arras, Director of the GAO\u2019s Education, Workforce and Income Security team, told the Daily Caller News Foundation.<\/p>\n<p>Income-driven repayment plans typically require the borrower to pay some percentage of their discretionary income, which can be as low as $0 per month, according to the <a href=\"https:\/\/studentaid.gov\/manage-loans\/repayment\/plans\/income-driven\" target=\"_blank\" rel=\"noopener noreferrer\">DOE<\/a>.<\/p>\n<p>\u201cWhile the Department always strives for the best possible estimates, there is some inherent uncertainty in the Department\u2019s cost estimates,\u201d said United States Under Secretary of Education James Kvaal, in a letter attached and responding to the GAO report. \u201cWe also recognize the unique circumstances of the pandemic, which have left families across the country facing unprecedented financial and health concerns.\u201d<\/p>\n<p>The program\u2019s deficit was approximately $21 billion in 2017 and 2018, before dropping to $16.1 billion in 2019, returning to $21.1 billion in 2020, according to the report. This indicates that record high deficits in the ballpark of $21 billion began almost two years before the pandemic.<\/p>\n<p>The only year between 1997-2021 where the program made money was 2012, when it made approximately $600 million.<\/p>\n<p>Of the remaining $122 billion in losses not accounted for by the Department of Education\u2019s overestimate, only $20 billion can be attributed to usual legislative changes to loan payment plans, according to the report. The overwhelming driver of the remaining losses was the CARES Act, which <a href=\"https:\/\/dailycaller.com\/2022\/04\/05\/joe-biden-moratorium-student-loan-payments-inflation\/\" target=\"_blank\" rel=\"noopener noreferrer\">suspended<\/a> student loan payments responsible for the remaining $102 billion.<\/p>\n<p>The Department of Energy estimates that the \u201caverage borrower\u201d has saved approximately $4,400 as a result of this payment pause, according to Under Secretary Kvaal\u2019s letter.<\/p>\n<div id=\"attachment_7423636\" class=\"wp-caption alignnone\"><img decoding=\"async\" aria-describedby=\"caption-attachment-7423636\" class=\"wp-image-7423636 size-full\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/Student-Debt-Getty-1-scaled-1.jpg\" alt=\"Rep. Ro Khanna (D-CA) speaks at a Student Loan Forgiveness rally on Pennsylvania Avenue and 17th street near the White House on April 27, 2022 in Washington, DC. Student loan activists including college students held the rally to celebrate U.S. President Joe Biden&#039;s extension of the pause on student loans and also urge him to sign an executive order that would fully cancel all student debt. (Photo by Anna Moneymaker\/Getty Images)\" srcset=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/Student-Debt-Getty-1-scaled-1.jpg 2560w, https:\/\/cdn01.dailycaller.com\/wp-content\/uploads\/2022\/05\/Student-Debt-Getty-1-180x120.jpg 180w, https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/Student-Debt-Getty-1-620x413-1.jpg 620w, https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/Student-Debt-Getty-1-768x512-1.jpg 768w, https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/Student-Debt-Getty-1-1536x1024-1.jpg 1536w, https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/Student-Debt-Getty-1-2048x1365-1.jpg 2048w\" \/><\/p>\n<p id=\"caption-attachment-7423636\" class=\"wp-caption-text\">Rep. Ro Khanna (D-CA) speaks at a Student Loan Forgiveness rally on Pennsylvania Avenue and 17th street near the White House on April 27, 2022 in Washington, DC. Student loan activists including college students held the rally to celebrate U.S. President Joe Biden\u2019s extension of the pause on student loans and also urge him to sign an executive order that would fully cancel all student debt. (Photo by Anna Moneymaker\/Getty Images)<\/p>\n<\/div>\n<p>Republican Reps. Virginia Foxx and Greg Murphy of North Carolina and Republican Sens. Richard Burr of North Carolina and Mike Braun of Indiana spoke out as the top Republicans on the House and Senate education committees, according to the <a href=\"https:\/\/www.washingtonexaminer.com\/policy\/education\/watchdog-department-of-education-311-billion-student-loans?utm_source=Alert_Breaking%20-%202022-07-29%209:42%20AM_07\/29\/2022&#038;utm_medium=email&#038;utm_campaign=WEX_Breaking%20News&#038;rid=25180568&#038;env=3a5ee56d1da20165926a7e99a2eefcd7652344bceb421d894d5348557d8303a0\" target=\"_blank\" rel=\"noopener noreferrer\">Washington Examiner<\/a>.<\/p>\n<p>\u201cFor decades, the Department of Education has significantly underestimated the true cost of the Direct Loan program. Today\u2019s GAO report shows that the Department\u2019s budget was off by more than $300 billion \u2014 all of which will be paid for by hardworking American taxpayers,\u201d they said in a <a href=\"https:\/\/republicans-edlabor.house.gov\/news\/documentsingle.aspx?DocumentID=408470\" target=\"_blank\" rel=\"noopener noreferrer\">statement<\/a>.<\/p>\n<p>President Joe Biden is under mounting pressure from Democrats to extend the suspension before it is set to expire on Sept. 1, <a href=\"https:\/\/thehill.com\/homenews\/administration\/3578239-democrats-urge-biden-administration-to-extend-student-loan-payment-pause\/\" target=\"_blank\" rel=\"noopener noreferrer\">The Hill<\/a> reported.<\/p>\n<p>The Department of Education did not respond to a request for comment by the Daily Caller News Foundation.<\/p>\n<p>Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact <a href=\"mailto:licensing@dailycallernewsfoundation.org\">licensing@dailycallernewsfoundation.org<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Department of Education (DOE) overestimated the revenue from the federal student loan program by almost $200 billion, according to a Government Accountability Office (GAO) report. The suspension of student<\/p>\n","protected":false},"author":1181,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1579492","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1579492","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1181"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1579492"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1579492\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1579492"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1579492"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1579492"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}