Student Loan Forgiveness Plans Cost Taxpayers Billions

Recently, President Obama has been touting his various student loan repayment plans, which provide repayment relief to recent graduates who are saddled with mountains of debt.

For those who qualify, these plans cap student loan payments at 10% of their monthly income, and provide forgiveness after at least 10 years of timely payments.

But what does “forgiveness” really mean? Does the debt just disappear?

The answer is no. These plans are putting the American taxpayer on the hook for billions of dollars a year. Those who made the tough decision to not attend college because they couldn’t afford it, will ultimately be helping pay the tab for their friends who did.

Not to mention some students will continue to run up their student loan debt now just because, well, why not? They won’t have to pay it all back.

In the end, college’s will continue to raise tuition because the federal government is backing these loans. Meaning? The money will be there whether the indebted students are making timely payments or not.

Check out this short article from the Wall Street Journal on Monday about The Ballooning Cost of Obama’s College-Loan Repayment Program.