The U.S government has announced its plans to forgive $108 Billion of outstanding student debt in the coming few years. The decision comes as more and more borrowers have sought help in paying off their existing debt, resulting in revenue losses for the government's program to finance higher education.
The Government Accountability Office disclosed the sum Wednesday in a report to Congress which for the first time projected the full costs of programs that set borrowers’ monthly payments as a share of their earnings and eventually forgive portions of their debt. The GAO report also sharply criticized the government’s accounting methods for its $1.26 trillion student-loan portfolio, pointing to flaws that have led it to alter projected revenues significantly over the years. The government says it still expects the program to generate a profit over the long term, but it has repeatedly trimmed expectations for revenues.