Issues@Hand

AFA initiatives, Christian activism, news briefs

July/August 2014 – Data compiled by analyst Mark Kantrowitz has revealed a startling increase in student loan debt. According to a report in the Wall Street Journal, loan-holding 2014 graduates will be responsible for repaying an average of $33,000 each. That compares to under $10,000 in 1993.

While the government reports a net cash inflow of $135 billion over the next 10 years resulting from various student loan programs, critics argue the government’s involvement has created an atmosphere of easy credit, soaring tuition costs and massive debt for individual students and U.S. taxpayers.

The government uses accounting rules spelled out in the Federal Credit Reform Act, which allows use of expected discounted numbers for calculating whether the loan will ultimately cost the government money or result in a profit.

A Congressional Budget Office Report released May 22, 2014, revealed that if the government used fair-value accounting, which considers real market risks, federal student loans could not be reported as cash inflows. Instead those loans would actually cost the government $88 billion over the next 10 years, a difference of $223 billion.

theblaze.com, 5/23/14; policymic.com, 5/17/14