(THE COLLEGE FIX) — “Income-driven repayment” is a way for people to pay off their student-loan debt in name only. They get to pay a percentage of their earnings each month and have the remaining debt forgiven in 10 to 25 years.
This might be profitable for the feds if more students were earning lucrative degrees, but instead it has become a massive drain on the Treasury, according to a new report by the Department of Education’s inspector general that also faults the agency for poor transparency.
The Wall Street Journal reports that the Obama administration “heavily promoted” the debt-forgiveness plans with the aim of slowing new defaults – and they proved too popular for their own sustainability:
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