White House Doesn’t Know How Much Expanding Loan Program Will Cost
Careeer College Central summary:
White House officials aren’t sure how much President Obama’s plan to expand the most generous income-based repayment program will cost, but they’re confident the proposal will be worth it. In a conference call with reporters this week, Cecilia Muñoz, director of the Domestic Policy Council, said calculating the cost of the expansion is tricky because the administration doesn’t know how many of the five million borrowers it expects to qualify for the benefit will actually enroll in the Pay as You Earn plan.
"Some of it depends on how many borrowers ultimately take up the option," she told reporters. "But there are clear economic benefits," to borrowers and the economy at large. "Ultimately, we believe it’s money well spent," she said.
Muñoz said the Education Department would come up with an estimated cost when it writes rules to carry out the policy change. In his budget for the 2015 fiscal year, released in April, Obama proposed extending his signature Pay as You Earn repayment plan to all borrowers. The administration projected that such a change would cost $7.3-billion over five years.
Under the latest plan, announced at a White House event on Monday, borrowers with older debt will be eligible to participate in the Pay as You Earn program. The expansion does not include reforms of the program proposed in the 2015 budget, but Muñoz said they would be considered as part of the rule-making process.
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