Mar 10, 2014
How Profitable Are Students in 2013?
Posted on May 17, 2013
The Obama administration is set to pull in $51 billion from student loans this year, “a sum greater than the earnings of the nation’s most profitable companies and roughly equal to the combined net income of the four largest U.S. banks by assets,” The Huffington Post reports.
The figure was announced Tuesday when the Congressional Budget Office adjusted its projected fiscal year profit for the Department of Education by 43 percent to $50.6 billion, up from an earlier estimate of $35.5 billion.
Budget documents show that the Education Department has collected nearly $120 billion in profit off student borrowers over the last five fiscal years, thanks to “record relative interest rates on loans as well as the agency’s aggressive efforts to collect defaulted debt.”
Student debt—the only kind of consumer debt to increase since the onset of the economic crisis—sits at $1.1 trillion. The drag is keeping student borrowers from making major purchases such as homes and new cars and diminishing their ability to save for retirement. Rates fixed by Congress on the majority of student loans are at 6.8 percent or 7.9 percent.
—Posted by Alexander Reed Kelly.
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