For Immediate Release November 2nd, 2012
The NY Times reported recently that the value of outstanding, defaulted, federal student loan debt was $76 billion. This is almost certainly grossly incorrect. The Department of Education typically will quote this number excluding interest that has accrued since the loans defaulted. The true value is this base amount (the total amount of defaulted loans at the time the loans defaulted) PLUS the interest that has since accrued on the defaulted loans.
Therefore, the true value of outstanding defaulted federal loans is far greater than $76 billion. How much greater? This is an open question. It could easily be double, or more than what is being reported.
We encourage members of the press to get to the bottom of this important question, and correct the record as is appropriate.
Contact: Alan Collinge
RETURN BANKRUPTCY PROTECTIONS TO ALL STUDENT LOANS