About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

Calculating the Budgetary Costs of Changes in Student Loan Programs 1 (February 10, 2016)

handle is hein.congrec/cbo2758 and id is 1 raw text is: O CONGRESSIONAL BUDGET OFFICE Keith Hall, Director U.S. Congress Washington, DC 20515 February 10, 2016 Honorable Tom Price, M.D. Chairman Committee on the Budget U.S. House of Representatives Washington, DC 20515 Re: Calculating the Budgetary Costs of Changes in Student Loan Programs Dear Mr. Chairman: This letter corrects my response to a question posed during the House Budget Committee's hearing last week on the budget and economic outlook. At that hearing, Congressman Woodall asked about the budgetary effects of reducing the volume of student loans made through federal programs. In response, I incorrectly stated that CBO's cost estimate for legislation reducing the volume of such loans would show budgetary savings for purposes of budget enforcement. For such purposes, CBO calculates the subsidy costs for student loans following the procedures specified in the Federal Credit Reform Act of 1990 (FCRA). Under those procedures, in CBO's January 2016 baseline projections, the discounted present value of expected income from federal student loans made during the 2016-2026 period is projected to exceed the discounted present value of the government's costs; that is, the loan program, overall, is projected to show budgetary savings.1 As a result, reducing the total volume of student loans made during the next decade would reduce those savings, resulting in budgetary costs. 1. Present value is a single number that expresses a flow of current and future income or payments in terms of an equivalent lump sum received or paid today; the present value depends on the rate of interest-known as the discount rate-that is used to translate future cash flows into current dollars.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most