If banks reported their liabilities using the same fictitious accounting that the federal government does for student loans, they’d be charged with fraud. Behold the Congressional Budget Office’s latest restatement of the cost for income-based repayment plans.

The Obama Administration promoted these plans as a way to reduce student loan defaults. Borrowers who couldn’t afford their monthly payments could refinance their loans for free. They merely had to agree to pay 10% of their discretionary income for 20 years—10 years...