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There is now a bipartisan desire not to collect on loans owed to American taxpayers. This week also brings the sad reminder that even when politicians feel like trying to collect the payments, they systematically mislead taxpayers about the risks of such loans. As for the congressional and White House appetite to avoid making taxpayers whole, a Journal editorial notes: Elizabeth Warren must be laughing as President Trump embraces so many of her policies, one after another. In recent weeks he has pushed for a cap on credit card interest rates and a ban on institutional investors buying homes, among other big government proposals. The latest move, announced last Friday, is a pause on the collection of defaulted student debt, Joe Biden-style. The Administration last spring made a point of declaring that there would be consequences for not repaying student debt. “American taxpayers will no longer be forced to serve as collateral for irresponsible
student loan policies,” Education Secretary Linda McMahon said. So much for that. The Trump team is now giving borrowers another reprieve… Incredibly, only about 26% of some $1.7 trillion in student debt is being repaid. Nearly 20% is delinquent. Most of the rest is in forbearance or deferment. If the Federal Student Aid office were a bank, it would have failed long ago. But even if Washington is making an effort to collect, don’t expect an honest accounting of the student loan program. In what has become an absurd ritual, the Congressional Budget Office periodically feels compelled to point out that because of a 1990 law, the official federal scorekeeping
for loan programs makes taxpayer losses appear to be winners by ignoring market risks.
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