U.S. to Forgive at Least $108 Billion in Student Debt in Coming Years

WASHINGTON—The federal government is on track to forgive at least $108 billion in student debt in coming years, as more and more borrowers seek help in paying down their loans, leading to lower revenues for the nation’s program to finance higher education. The Government Accountability Office disclosed the sum Wednesday in a report to Congress which for the first time projected the full costs of programs that set borrowers’ monthly payments as a share of their earnings and eventually forgive portions of their debt. The GAO report also sharply criticized the government’s accounting methods for its $1.26 trillion student-loan portfolio, pointing to flaws that have led it to alter projected revenues significantly over the years. The government says it still expects the program to generate a profit over the long term, but it has repeatedly trimmed expectations for revenues. President Barack Obama has promoted income-driven repayment plans—passed by Congress in the 1990s and 2000s—to stem a sharp rise in borrowers defaulting on their loans since the recession. Enrollment in such plans has more than tripled over the past three years to 5.3 million borrowers, who owe roughly $269 billion, according to Education Department statistics cited by the GAO.