A new watchdog of the government allegedly reported that more than 76,000 people are committing fraud with the student loan. A report released by the Government Accountability Office of the US that the borrowers who had enrolled in a student loan plan whose repayment was involved with their income committed certain frauds.
About 76,200 people complain of not receiving their income timely or zero income at all due to which they are unable to pay off their student loan. Therefore, these users have paid very less amount than they normally should have. These people have originally been enrolled under 95,100 plans that are income-driven. According to the analysis done by GAO, this constitutes 11% of all the income-driven plans. As of September 2017, these borrowers owed a direct loan of 4 billion dollars.
The GAO says that among these borrowers around 34% of the people earn around $45,000 per year and some have the earning of about $100,000 in a year. Out of 40,900 plans that were analyzed 1% among them had more than nine members in their family.
There are possibilities of the borrowers to have misunderstood some of the questions, which have resulted in proving wrong information. There are also chances of the student loan debt companies to enter information on behalf of the borrowers. Perhaps, there are chances of some more innocent reasons to intervene with the results that the GAO has deduced.
The reason behind the potentially false information is unknown and so is the identity of these specific borrowers. But, if the borrowers who have erroneously claimed of having zero income to not to repay their student loan they are certainly cheating the taxpayers as well as the federation. This is being said because if a borrower fails to pay the student loan monthly because of the income issues, the federation won’t be able to collect the money every month.
After 20 to 25 years, the borrower may receive the student loan forgiveness but the taxpayers will have to pay extra money. As a matter of fact, this is done to compensate the forgiven amount of the student loan that wasn’t paid by the borrower. Generally, in an income-driven student loan repayment plan, a borrower pays the money on the basis of his income, the number of members in his family and some other crucial factors govern the repayment amount.