What Happened to Warren the Watchdog?

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Media Outlet: Politico Magazine

The best example is the federal student loan program, which offers below-market interest rates and other generous terms to subsidize college attendance. Because the government effectively assumes its estimate of what student loan recipients will pay back carries no risk, official cost figures show the program earning a profit of $135 billion over the next 10 years. But the idea that a government program can subsidize students and generate profits at the same time should give anyone pause. Indeed, when the Congressional Budget Office applied fair value methods to federal student loans, it found that the “profit” is actually an $88 billion loss for the taxpayers.

Author:

Jason Delisle is the former director of the Federal Education Budget Project, which is part of the Education Policy program at New America.