Senator Mike Enzi (R-WY), Chairman of the Senate Budget Committee, released a letter this week asking Education Secretary Betsy DeVos to conduct a comprehensive audit of all student loan-related data maintained by the Department of Education.
Last fall, a report from the Government Accountability Office (GAO) that Chairman Enzi requested found that the prior Administration consistently underestimated the projected cost of income driven student loan repayment (IDR), primarily by consistently underestimating the portion of students likely to sign up for it. GAO’s report found IDR is now expected to cost tens of billions more than original estimates -- in part due to unilateral actions taken by the prior Administration — and is expected to result in $108 billion in loan principal forgiveness being absorbed by taxpayers.
“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,” wrote Chairman Enzi. “If Congress is to continue to entrust the $100 billion annual federal student lending operation to the agency, it must show that it can maintain accurate records of loan transactions, costs and performance -- as any financial institution must. The current transition provides an ideal opportunity to establish a firm baseline for moving forward. Therefore, I recommend that you conduct a comprehensive audit of all student loan-related data maintained by the Department – whether used for budgetary, regulatory, public information or other purposes – and take steps to ensure the integrity of the data going forward, starting with the implementation of recommendations made by the GAO in the aforementioned report.”
During the final days of the last Administration, an Education Department official posted a notice conceding that the agency’s on-line College Scorecard – a site it claimed that 1.5 million users have visited to explore their college options – had featured flawed data that inflated student loan repayment rates. The corrected data reveal that the average college saw less than half its former students managing to pay its loan principal balance down by a single dollar three years after leaving school. The Scorecard data had indicated that two-thirds of such borrowers had reduced their balance.
View Chairman Enzi’s letter to Secretary DeVos here.