U.S. government to forgive $108 billion in student debt
December 2, 2016
A report by the U.S. Government Accountability Office revealed on Wednesday that $108 billion in student debt is expected to be forgiven in the next few years.
This estimate does not factor in inflation, but is higher than expected. The report is based on the number of borrowers that repay their debts on a monthly-income basis.
Under the Obama administration, income-driven borrowers can put 10 to 20 percent of their discretionary income (what’s left after living essentials) toward repaying their student loans. After 20 to 25 years, the remaining balance, if there is one, is forgiven.
Excluding discharged loans due to death or disability, this to-be-forgiven amount is approximately $108 billion.
President-elect Donald Trump has proposed to increase the repayment rate to 12.5 percent of discretionary income over a minimum of 15 years.
To read the full report by the Chronicle of Higher Education, click here.