A bombshell report from the Government Accountability Office (GAO) on Wednesday shattered faulty accounting from the Department of Education on the cost of the Federal Student Loan Program. The new cost estimate to taxpayers for all loans issued through 2017 is expected to be $108 billion, far higher than originally expected. In my student loan consulting business, I’ve saved almost 100 clients over $10 million in the past two months. Almost all of this money was at the expense of the US government.
The GAO report’s cost projections for student loans through 2017 are far too low, and the report includes no costs for future years of loan issuance under current rules. Based on what I see as a private student loan consultant, the US will forgive $1 trillion of student debt over the next 20 years. The government created one of the largest entitlement programs in history by accident, making college mostly free for millions of Americans if they use the loan rules to their advantage.