Dear Commons Community,
Earlier this year on May 16th, I posted on this blog that the U.S Department of Education through its policies has managed to turn the student financial loan program into a magnificent profit center for the federal government, more lucrative than the most successful American businesses. “The Obama administration is forecast to turn a record $51 billion profit this year from student loan borrowers, 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.”
Yesterday, after months of discussion, under the new federal student loan program endorsed by President Obama and approved by the Senate, the U.S. government is forecast to generate $185 billion in profit over the next decade from students and their families. The profit figure, if annually averaged through 2023, would place the U.S. student loan program among the 20 most profitable public companies in the world, according to Fortune magazine’s annual list of the world’s 500 biggest companies. The bipartisan Senate bill would increase the government’s profit off student borrowers by more than $700 million compared with existing law, the Congressional Budget Office said.
As reported in The Huffington Post: “Students, in essence, are subsidizing the government,” Sen. Sherrod Brown (D-Ohio) said. Sen. Barbara Boxer (D-Calif.) said that the profit estimate was “unjustifiable” and that the Senate measure “exacerbates the problem.”
“Why are we piling on another $715 million of debt onto the backs of our students?” Boxer asked.
As I commented in May, “this is an incredible turn of events for an administration that has supposedly sought to help students go to college and to ease their financial burdens.” Again there is a contradiction here if not hypocrisy.