The Department of Education’s massive computer system that stores data for more than 40 million Americans with student loans is so outdated and slow it can’t track how many people are actually enrolled in the government’s loan forgiveness and repayment programs.
As a result, the system can’t answer key questions that would help Education officials determine how effective the loan programs are at reducing the burden for borrowers, The Wall Street Journal has noted. Given the lack of up-to-date information, the government has significantly underestimated how much the programs are costing.
In January, the Department of Education said the Obama administration’s income-based repayment plans would cost about $22 billion more than originally anticipated. That increase was likely because the system had inaccurate information about how many people are actually taking advantage of the program and how much they were expected to repay.
The revision was mainly attributed to the higher-than-anticipated enrollment in the Pay As You Earn program. It caps borrowers’ monthly payments at 10 percent of their income, then forgives the debt after 20 years of consistent payment. Originally, people could qualify if they took out loans after October 2007 and continued borrowing through 2011 – but President Obama recently expanded the program to borrowers who took out loans even before that.
When the program first started it had dismal enrollment numbers, but now sign-ups have surged. The number of people enrolled in income-based repayment plans doubled from 1.1 million in 2013 to 2.2 million in 2014. Yet the department’s data system has not been able to keep pace.
In addition, department officials say the system also doesn’t allow them to easily and accurately analyze the data to figure out how many people are defaulting on their loans. This adds to the challenge of determining if the repayment programs are actually working.
“What the department failed to do is to create a really strong process that’s robust in protecting personal identity and at the same time makes that information available to legitimate researchers,” Thomas Weko, a managing researcher at the American Institutes for Research and formerly a senior official at the Department of Education, told The Journal.
To correct that, the Obama administration has requested $11.6 million to build a more modern data system that can sufficiently keep track of who’s enrolled in the program and how much they’re expected to repay the government.
It’s too early to tell, of course, how achievable that is since the government doesn’t exactly have a good track record with major IT projects. Think of the rollout of HealthCare.gov, or the VA Department’s electronic health records modernization system – both of which have cost billions of dollars.
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