(The Daily Signal) In case you ever had any doubts about the inefficiencies of the Department of Education, look no further than the recent revelation that the agency has been vastly underestimating student loan repayment rates.
On the last day of the Obama administration’s tenure, the College Scorecard the department established has been quietly revealed to have serious flaws.
The Obama administration conceded coding errors found in the College Scorecard inflated college repayment rates, potentially misleading students. The Wall Street Journal went as far as to report that, “on closer inspection, the mistake doesn’t look innocent or innocuous.”
The College Scorecard was created to provide students with more information about their financial future when graduating college. Students who went on the College Scorecard website and found that a school had a relatively low student loan default rate might have been encouraged to attend that institution, making the decision that their financial investment in college would be a benefit to them in the future.
However, as The Wall Street Journal reported, the Department of Education overstated the three-year repayment rates of students—meaning, students who have paid at least $1 back on their student loans—by about 20 percentage points.
Perhaps more alarming is that with the new accurate repayment rate of 46 percent, this now means that most college graduates are not paying off their student loan debt at all.
When we lump this new information in with the recent Government Accountability Office finding that the taxpayers will forgive $108 billion in student loans over the next 10 years as a result of the public sector loan forgiveness provision, it is time for policymakers to take the financial mess of higher education seriously.
With college costs rising at a rate twice that of inflation and the unemployment rate of recent graduates rising, the higher education sector requires a dramatic policy redirection….