Betsy DeVos has announced her intention to address some of the education department's loan problems by cracking down—on borrowers
DeVos announced her intention to scrutinize the reporting of income and family size in those who are repaying their student loans under income-driven repayment plans. Citing"deliberate efforts to make the maze of student aid more complex for students and less accountable to the American taxpayers who underwrite it," DeVos took a get-tough stance on the issue:
Misrepresenting income or family size is wrong, and we must have a system in place to ensure that dishonest people do not get away with it. We didn't create that problem, but rest assured we will fix it." DeVos is looking for Congressional action that will allow the Department of Education to"partner" with the IRS to verify borrowers' information.that points to the problem. In looking at 95,100 IDR plans which reported zero income, the GAO found that roughly a third were making considerably more than nothing . In looking at 40,900 IDR plans approved based on a family size of nine or more, the GAO found under 1,200 reporting a family size of sixteen or more.
How large a problem is this, actually? The GAO found roughly 32,000 borrowers who might possibly be cheating the government. The questionable plans would account for about $2 billion of the outstanding federal direct loans. The grand total for all federal direct loans is $859 billion, with about half of that being repaid through IDR plans. So while $2 billion is not peanuts, DeVos is talking about 0.2% of the total outstanding federal direct loans.
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