As the student loan bubble continues to burst, record numbers of Americans enrolling in government subsidized student loan debt-forgiveness plans, known as income-driven repayment, are on track to send the US student-loan program into negative territory, according to a report by the Department of Education’s inspector general.

The plans, known as income-driven repayment, set monthly payments as a percentage of a borrower’s earnings and typically forgive balances after 10 or 25 years, depending on the borrower’s career field and debt amounts.

Overall, borrowers in income-driven repayment will repay less than what they originally borrowed, the report said, draining the program of billions of dollars in expected revenue. –WSJ

As we reported last month, nearly 40% of student loans taken out in 2004 may default by 2023 according to a report by the Brookings Institute – blowing past all previous projections.

Of note, approximately 5% of undergraduates took out private student loans in 2004, which swelled to 14% of undergraduates by 2008 – 2,901,000 students according to ticas.org. Private student loans, as opposed to federal student loans, are unable to participate in income-driven government repayment programs. ……more here