US to Forgive $108 Billion in Student Loan Debt

The federal government is expected to forgive at least $108 billion in student loan debt, according to congressional investigators.

The plans calculate the monthly payback payment as part of a borrower’s income.  And it extends the term of the loan from 10 years to up to 25 years. After that, the remainder is forgiven.

The Obama administration has encouraged borrowers to consider them, and set up a website, www.StudentLoans.gov/Repay , in April.

The Government Accountability Office reviewed income-driven repayment plans the government offers to students struggling to pay back federal student loans. The report, which was highly critical of the Education Department’s budget estimates for the programs, said $29 billion more will be discharged due to death or disability. About 5.3 million borrowers carrying some $355 billion in loans are part of the repayment plans.

The GAO faulted the department for how it has estimated costs for the plans, saying it found “numerous shortcomings” in the agency’s approach. The report said, “weaknesses in this approach may cause costs to be over- or understated by billions of dollars.”

The report said the department generally agreed with the GAO’s recommendations and that it’s taking steps to improve its budget estimates.

The Associated Press reported this story. 

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