Last month, Wyoming Senator Mike Enzi called on the Department of Education to conduct a full audit of the government’s student loan programs. He cited errors found in a Government Accountability Office report, as well as errors admitted by the Education Department from 2016 and this year including incorrect numbers for borrowers, enrolled in income-driven repayment (IDR) plans, underestimation of the balances of these IDR borrowers, and an overall miscalculation of the final cost of the IDR program.
In a letter to the new Secretary of Education Betsy DeVos, Enzi, the Charmian of the Senate Budget Committee, said he wants an audit to ensure that there aren’t any more errors that may impact student loan repayment. Additionally, he wants to avoid false or incorrect information being delivered to families about the true cost of college.
The Senator took issue with a Department of Education announcement in January during the last days of the Obama’s Administration. The issue involved a coding error in College Scorecard data that resulted in undercounting borrowers who had not reduced their loan balances, ultimately inflating repayment rates for most colleges and universities. Enzi argued that the inaccurate repayment rate creates an “exaggerated impression” of how quickly students will be able to pay down their student loans.
As mentioned earlier, the Wyoming Senator referenced the Government Accountability Office study that he requested in 2016. After release in November of 2016, it showed that the Obama Administration “consistently underestimated the projected costs of IDR by regularly underestimating the portion of students likely to sign up for it” according to Enzi’s press release.
“It’s important to realize that if the Education Department were a bank, it would be among the largest in the nation, based on its $1.3 trillion student loan portfolio,” Enzi said in letter to DeVos. He continued to note that if Congress continues providing $100 billion in annual federal student loans, then “it must show that it can maintain accurate records of loan transactions, costs and performance – as any financial institution must.”
Enzi may be on to something, especially considering that his state has below average student loan debt per borrower compared to the nation. Currently, graduates from Wyoming owe an average of $22,683 according to data from LendEDU which is lower than the national average which stands at around $28,000. On top of this, the default rate among graduate borrowers in Wyoming is roughly one third of the national average at 4.2 percent.
Enzi, the twenty-year Republican Senator, supports low interest rates on federal student loans and tax breaks for borrowers, but he isn’t keen on expanding Pell Grants, arguing that every time the program is expanded tuition rates increase. At any rate, it is clear that he supports fiscal accuracy, especially if it will save money on some of the most expensive federal programs in the country.
Author: Donna Fuscaldo
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