‘Money-Losers’: Student Loan Costs Have ‘Exploded’ Over the Last Decade to $340 Billion More Than Projected

Student loan repayments and interest were projected to generate $135 billion for the federal government — but ten years later, that’s not how things have shaped up.

AP/Susan Walsh
President Biden and the education secretary, Miguel Cardona, at the White House. AP/Susan Walsh

The cost of federal student loan programs has “exploded” in the last ten years, transforming them from what was expected to be  a “money-maker” for taxpayers to a “significant money-loser” for the federal government, according to a fiscal watchdog’s new report.

The programs over the past decade have cost hundreds of billions of dollars more than originally projected, a report by the Committee for a Responsible Federal Budget, states, citing new data from the Congressional Budget Office. The estimated federal cost of student loans from 2015 to 2024 has “increased by $340 billion — from a projected gain of $135 billion in the 2014 baseline to an expected loss of $205 billion in the 2024 baseline,” it says, adding that even the $340 billion cost is likely an “underestimate.”

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