SURPRISE. The Obama Administration Was Making Up Student Loan Repayment Data

As the Trump administration takes charge, plan of finding a lot more of this nonsense. The Obama administration, following the lead of the president, had no scruple about lying to the Congress and the American people if it served their policy goals. We saw that with Benghazi. We saw it with ObamaCare. We will see it with global warming data. And now we have conclusive evidence that it happened in the Department of Education.


One of the main thrusts of the Obama Education Department, other than targeting young men for bogus charges of sexual assault and stripping them of the ability to defend themselves, was making the Student Loan program a Student Money Giveaway program. To this end they put the government on the hood for billions of dollars in student loans that will never, ever be repaid because most of them went to kids who never completed college because they had no business in college in the first place or they went to kids who followed their dream of getting a Master’s degree in jazz clarinet and will never be gainfully employed.

This has created a Circle of #FAIL where banks don’t care who they lend to because Uncle Sugar is no the hook for the loan, colleges have no incentive to keep tuition down because students no longer care about how much debt they have to assume because of an Obama invention called the Income Drive Repayment plan (IDR):

“The most generous version of income-driven repayments caps a borrower’s monthly payment at 10 percent of discretionary income, which is defined as adjusted gross income above 150 percent of the poverty level. That formula typically lowers monthly payments of borrowers by hundreds of dollars. Public-service workers—those employed by a government agency or at most nonprofits—have balances forgiven after 10 years, tax-free. Private-sector workers have balances forgiven in 20 or 25 years, with the forgiven amount taxed as ordinary income.”


All the while the Obama administration was reporting numbers that, while not rosy, were marginally sustainable.

Now the other shoe has dropped:

With the media’s focus on the Inauguration and the new president’s first week in office, a recent Wall Street Journal report has gone little noticed. According to the report, on January 13 (just one week before the outgoing administration up and went), the Obama Department of Education dropped a memorandum confessing that it had “overstated student loan repayment rates at most colleges and trade schools.” The “updated numbers” provided by the Department were analyzed by the Journal’s staff, who found that the new data “revealed that the Department previously had inflated the repayment rates for 99.8% of all colleges and trade schools in the country.”

This number (99.8 percent) is about as close as you can get to being completely wrong in measuring the extent of a crisis that higher education reformers have been warning us about for some time. In short, for the last eight years, the American people have not been told the whole story about just how bad the student-loan default crisis really is.

When the student-loan repayment rates were originally published in 2015, more than half of the students at 347 colleges and vocational schools were found to be in arrears in their payments. Then, in September of last year, the Department raised that number to 477. Now, the “update” shows the number grew to 1029 schools. “Worse, no college saw its repayment rate improve under the revision, and some schools saw their seven-year repayment rates fall by as much as 29 percent.”


In other words, to get the data that was pretty ugly to begin with, the Department of Education had to inflate the loan repayment rates at virtually every single school in the nation. In many cases the degree of inflation was analogous to popping the CO2 cartridge on a life vest.

The damage is done. Taxpayers are going to be on the hook for tens of billions of dollars in defaulted student loans. No one is going to be held to account though the fraud perpetrated here makes Bernie Madoff look like a cheap street hustler. And you can bet this went on in every single Obama-run agency.


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