Federal Government Makes Money On Student Loans

[HiPointDem]

Interesting - the federal government actually makes money on student loans. No wonder those in power seem to want the interest rates to double.

The interest rate on many student loans is scheduled to double on July 1, to 6.8 percent from 3.4 percent — just as it was last year, when in the midst of an election campaign, Congress voted to extend the lower rate.

Again this year, no one wants the increase to happen, especially since even the current rate is well above market...On Tuesday, the day before the White House plans to send its budget to Congress, student advocacy groups are releasing an issue brief charging that the federal government should not be profiting from student loans, while more and more students bear a crushing debt burden.

The brief, citing a February report from the Congressional Budget Office, said the federal government makes 36 cents in profit on every student-loan dollar it puts out, and estimates that over all, student loans will bring in $34 billion next year.

“If the numbers are accurate, the government will make more money on student loans than Ford makes on automobiles,” he said. “Using student loans to create a profit center is not what anybody intended.”

http://www.nytimes.com/2013/04/09/education/student-loan-rate-set-to-rise-despite-lack-of-support.html?_r=1&

Seems like everybody is making money off the college students.

There's the College Board and the SAT prep companies and the colleges themselves and the companies that hire these students or graduates as interns and pay them nothing and now we see that the government makes more money off loans than Ford makes off cars.

Generation Debt really is screwed.

http://perdidostreetschool.blogspot.com/2013/04/federal-government-makes-money-on.html

[HiPointDem]

2. kick