LendEDU, a private firm that connects students and their families with student loans and loan refinancing, has finally revealed a clue that helps us better understand the mystery of why so many college students across the country have become so comfortable haphazardly taking out $100s of thousands of dollars in student loans to fund their degrees in anthropology. According to a survey of 500 current college students conducted by LendEDU, apparently 49.8% of America's entitled youth is convinced that the federal government will simply forgive their student loans upon graduation...call it a nice little taxpayer funded graduation gift.

Of course, as the US Department of Education points out, only a select few students who actually enter into public service jobs, teach in underserved areas or attend schools that shutdown within 120 days of their graduation actually qualify for federal loan forgiveness.

The US Department of Education says that federal direct student loan borrowers can get off the hook if they enter public service jobs for a specified period of time, agree to teach in an underserved area, die or become permanently disabled, or if the school they attended shuts down while they are enrolled or within 120 days after they leave. “The biggest exemption is the Public Service Loan Forgiveness Program, and very few students go into public service,“ said Nate Matherson, who co-founded LendEDU in 2014. “With maybe 14 percent of the American workforce in a public service job, the actual numbers of those who may qualify for student loan forgiveness or discharge is maybe below 10 percent. “The fact that many students do not understand this means that they may be significantly underestimating the cost of financing a college education,” he added.

Of course, maybe these students are just planning on never getting a job after college and thus relying on Obama's executive actions on "income-driven repayment" (IDR) plans that would repay a portion of their loans if they fail to hit certain income thresholds (see report entitled "Federal Student Loans: Education Needs to Improve Its Income Driven Repayment Plan Budget Estimates" from the Government Accountability Office). In this scenario, the student loans of these 50% of college students would, in fact, fall into the $137 billion bucket that the GAO figures Obama saddled on the backs of taxpayers through his unilateral executive action.

For the fiscal year 2017 budget, the U.S. Department of Education (Education) estimates that all federally issued Direct Loans in Income-Driven Repayment (IDR) plans will have government costs of $74 billion, higher than previous budget estimates. IDR plans are designed to help ease student debt burden by setting loan payments as a percentage of borrower income, extending repayment periods from the standard 10 years to up to 25 years, and forgiving remaining balances at the end of that period. While actual costs cannot be known until borrowers repay their loans, GAO found that current IDR plan budget estimates are more than double what was originally expected for loans made in fiscal years 2009 through 2016 (the only years for which original estimates are available). This growth is largely due to the rising volume of loans in IDR plans. Education’s approach to estimating IDR plan costs and quality control practices do not ensure reliable budget estimates. Weaknesses in this approach may cause costs to be over- or understated by billions of dollars.

Of course, we still kind of like this guy's idea for repaying student debt...it's a novel approach whereby borrowers are encouraged to stop playing video games in their parents' basements and get a job...it just might be crazy enough to work.