Office of Management and Budget: +$1.4 Trillion in Direct Loans by 2025

Projected Direct Loan Balances (OMB, Billions Current $)

(Source: OMB FY2016 Mid-Session Review (pdf))

…But we all knew it was going to say that. Also, that number includes other loan programs that aren’t student loans, but those aren’t nearly as big.

The good news, though, is that the actual amount of direct loans keeps coming in below the projections. Here’re the estimates from the mid-session reviews since FY2010 against the actual.

Direct Loan Balance Projections (OMB Billions Current $)

The FY2010 estimate was $161 billion more for 2014 than turned out to be the case. This variance implies that the government is overestimating future direct lending. It isn’t much, but it’s something to keep track of.

I should add that in general the OMB predicts that direct loan debt will even out at about 9 percent of GDP.

3 comments

  1. Hey, heier edumacation ain’t cheap, yo. Whooz gonna pay for all those administrator salaries and pensions and tenure and stuff, especially since they are clearly on a mission-from-God and training the next generation of future leaders(tm)? That’s worth another trillion, easy. Hell, while we’re at it, two.

  2. Federal Reserve Bank of New York from April,

    “The number of active student loan borrowers peaked in 2010, at about 12 million, and is now down to about 9 million.”

    Clearly, this is because the job market for BA’s, MA’s, PhD’s, JD’s is on fire so 3 million fewer people borrowed to get a degree. /sarc off.

    Federal Reserve Bank of the United States a couple of days ago by mistake:

    Yield on US 10-year treasury to go to 4.2% by 2020. You know the rest of the story.

    Plus, FFELP-backed ABS. If you’re a creditor holding a technically defaulted ABS and the federal government is telling you that because of IBR (that it extended by administrative action to loans that never contained IBR in the promissory notes…at the 11th hour in the life of the loan) that they won’t be paying out your guarantee for 25 additional years, are you going to sit around or are you going to test the legality of that administrative action and the government’s disingenuous definition of “default”?

    A little birdie told me if you’re out 40 billion and counting, you don’t sit around for 25 years waiting to see if the US federal government has any full faith or credit left.

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