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Taxpayer Student Loan Risk

What portion of all student loan debt in the U.S. is owed to the federal government?

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As of the third quarter of 2024, 94% of all outstanding student loan balances were owed to the federal government. Per the U.S. Treasury, the federal government creates loan programs so that people who are “unable to afford credit at the market rate” or have a “high risk” of defaulting can borrow money at “an interest rate lower than the market rate.” As explained by the Congressional Budget Office, “When the government extends credit, the associated market risk of those obligations is effectively passed along to citizens....” In 2010, Congress and President Obama passed a law requiring that all new federal student loans be financed directly by the U.S. Treasury. This bill passed with 88% of Democrats voting for it and 99% of Republicans voting against it. Since then, Democrats have repeatedly tried to transfer this debt to taxpayers.




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