One government loan program has a 116% default rate

The White House budget office recently listed an Agriculture Department program called Broadband Treasury Rate Loans as having a default rate of 116.37%. By comparison the average default rate for bank loans is about 3 percent and the troubled student loan program has lifetime default rates around 25 percent. Politico,

How on earth could a credit program, even a risky one, get to 116 percent? Were the recipients defaulting en masse, then stealing an extra 16 percent from the Treasury?

The explanation I eventually got from the Obama administration was not that damning. But it wasn’t exactly comforting, either. The crazy number was apparently produced by flawed execution of a flawed model of a flawed program. In reality, the Agriculture Department expects to recover about 80 cents of every dollar it lends to telecoms to extend high-speed Internet to underserved rural areas. Administration officials couldn’t pinpoint the actual default rate, but it’s much lower than 116%. They say the main culprits for that wrong number were a radically overbroad definition of “default,” as well as some inappropriate double-counting.