Whoops! Department of Education Makes $300 Billion Accounting Mistake on Student Loans

What’s $300 billion between friends?

A new report from the Government Accountability Office details a breathtaking discrepancy between what the federal government claimed the student loan program would generate, and what it actually costs taxpayers. As GAO explains:

“Although the Department of Education originally estimated federal Direct Loans made in the last 25 years would generate billions in income for the federal government, its current estimates show these loans will cost the government billions.

That’s right, instead of “making” $114 billion for taxpayers as the Department of Education originally claimed, the federal student loan program actually costs taxpayers $10 billion annually, costing $197 billion since 1997–a $311 billion discrepancy.

To put a finer point on it, GAO found that federal student loans were “originally estimated to generate $6 in income per every $100 disbursed.” Instead, they’re “expected to cost the government almost $9 for every $100 disbursed.” Whoops.

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