After a pause in student loan repayments during the COVID-19 pandemic, borrowers have started paying again. But if history is any guide, some student loan borrowers will pay next to nothing—and after 10, 20, or 25 years, taxpayers, not borrowers, will be forced to pay the outstanding balances.
Now, some members of Congress are trying to extend this freeloading loan scheme to even more students.
A new federal report on student loans found that the share of borrowers who choose income-driven repayment plans increased between 2009 and 2019. Under these plans, borrowers’ monthly repayment amounts vary according to their income. Meanwhile, interest accrues as students pay little or nothing on the principal.
The interest accrual would be bad news for borrowers, except that under the current rules for these repayment plans, taxpayers—not borrowers or students—pay off…
