President Biden’s student-loan boondoggle is poised to become a logistical nightmare for the Department of Education. On Wednesday and Thursday, StudentAid.gov, the department’s financial-aid webpage, experienced delays “after it was inundated with people seeking information on loan forgiveness,” Axios reports. But the possibility that this becomes another botched HealthCare.gov-style rollout isn’t even the problem.
This is the problem:
The agency doesn’t have income data for most of the 43 million Americans eligible for forgiveness, meaning around 35 million people — including Pell Grant recipients — will have to attest that they makes less than $125,000 per year and apply for relief.
We can expect a virtual stampede of people filing claims for this amnesty, and income eligibility for most of them will apparently be confirmed by . . . their own personal guarantee.
What could go wrong?
We’ve seen all manner of pandemic-spending fraud come to light, as the government rushed out trillions in aid. With debt-saddled former students seeing this potentially as their one shot to wipe clean the slate — after all, this could be the last debt “cancellation” they’ll see — the potential for number-fudging is apparent. Experts believe the federal government already loses nearly $150 billion annually from fraud, and most government programs discover less than half of those financial losses. We should hope that most borrowers visiting StudentAid.gov will consider the possibility that the IRS (especially with 87,000 new employees!) will eventually find out if they’re lying.
Meanwhile, the projected cost of this scheme seems to be rising by the hour. The Committee for a Responsible Federal Budget estimates the giveaway will amount to roughly $500 billion. Another analysis says it’s potentially over $1 trillion.
We ask again: What could go wrong?