Millennials don’t want a handout from the government. However, when it comes to student loans, they need all the help they can get.
According to a new report released by the Government Accountability Office on Wednesday, the federal government is on track to forgive at least $108 billion in student debt in the coming years. Student loan debt for college has surpassed $1.2 trillion this past year, and there hasn’t been any sign of slowing down, until now.
The GAO report strongly criticized the federal government’s accounting methods to amass that big of a portfolio, hitting on specific flaws that have led to altered projections in revenue over the years. Meanwhile, the government expects it still will make a profit over the long term through the student loan program. At the same time, it has consistently trimmed down revenue expectations.
President-elect Donald Trump has explicitly addressed how he’ll deal with the student loan crisis. Back in October when he was still campaigning for the presidency, Trump addressed a crowd of millennials in Columbus, Ohio and said he supported the idea of helping student-borrowers.
“Under President Obama and Hillary Clinton, the national debt has almost doubled: $20 trillion,” Trump said during that speech. “Under my student loan program, we will cap repayment of an affordable portion of a borrower’s income at 12.5 percent. That gives you a lot to play with.”
Trump’s plan would also include forgiving balances after 15 years. Public service workers, employed by the federal government or at most non-profit, have their balance forgiven after 10 years, tax free. Meanwhile, private-sector workers have their student loan balances forgiven after 20-25 years, with the forgiven amount taxed as ordinary income.
While $108 billion makes a slight dent into the $1.26 trillion debt, it’s a start. If millennials had it their way, President-elect would truly make America great again by solving the student debt crisis.