The old aphorism calls a picture worth 1,000 words. But in at least one case, a series of pictures can be worth more than $1 trillion.
A recent report from the Congressional Budget Office (CBO) provides helpful charts showing the many problems associated with the current federally subsidized loan program. As with many crises caused by government, the problem with student debt has many causes, and Democrats’ proposed “solution” — making all taxpayers responsible via massive “loan forgiveness” — would only make the problem worse.
Students Not Repaying ‘Loans‘
The CBO analysis examined federal student loans that began repayment from July 2009 to June 2013, tracking those loans through 2019. The period analyzed came after the worst of the Great Recession and before the Covid pandemic scrambled the economy and led to a massive student loan amnesty in 2020.
Over the four years examined, the percentage of borrowers who chose income-driven repayment (IDR) more than tripled, from 10 percent in the first year to 33 percent in the fourth year:
As CBO explained, while fixed payments remain constant throughout the entire repayment period, the IDR process “allow[s] repayment over a longer period — typically 20 or 25 years instead of the usual 10 — after which any remaining balance is forgiven,” and can require “payments” of as little as $0, which “still count towards the total number of payments required for forgiveness.”
Unsurprisingly, the number of debtors choosing this option has grown “as plans with smaller expected payments and
