USA TODAY: The U.S. government projects to make more money off student loans this fiscal year than ExxonMobil, Apple, J.P. Morgan Chase or Fannie Mae made on their respective businesses last year, a new analysis shows…
“I can understand private companies making profits off student loans — part of mine are private — but it doesn’t make sense for the government to be making huge profits off the backs of young students just trying to make themselves employable in a terrible economy,” said Kristy Currier, 26, of Detroit.
The record-high profits on student loans come during a time of historically low interest rates on home mortgages and car loans. While a home buyer can get a 30-year mortgage at about 4.5% interest, the federal government is charging as much as 6.8% interest on unsubsidized student loans and is less than a month away from automatically doubling the interest rate on the loans headed to poor students unless Congress takes action… (more)
EDITOR: Before the federal government took over the lending in 2010, banks were charging more and reaping even bigger profits.
This pitiful policy not only drives tuition inflation, but demonstrates the government’s unwillingness to plan for the future (by not educating its citizens).
It’s sad that the best lesson college students learn these days is to mistrust their government.