The federal government is well on its way toward lending more money in student loans than it is repaid, according to a new report from the Department of Education’s Office of Inspector General.
The rising cost of the federal student-loan program, the report says, is due in large part to the growing number of borrowers who are enrolling in income-driven repayment programs, which allow them to repay their loans for a set period of time in correlation to how much money they make.
“Borrowers have been signing up for IDR plans, such as PAYE and REPAYE, at a substantial rate,” the report says. (The acronyms refer to the Pay as You Earn and Revised Pay as You Earn plans.) The office’s analysis found that the portion of direct loans being repaid through income-driven repayment plans has increased 625 percent from the students who borrowed in the 2011 fiscal year to those who borrowed in the 2015 fiscal year.
Read more at The Chronicle of Higher Education: https://www.chronicle.com/article/Federal-Student-Loan-Program/242426