Government student loan program more profitable than Exxon Mobil - | WBTV Charlotte

US government set to make record profits from student loans, more than top corporations

Student loan debt has exceeded $1 trillion, but the Department of Education is expected to make more than $50 billion in profit from loans. Student loan debt has exceeded $1 trillion, but the Department of Education is expected to make more than $50 billion in profit from loans.
  • National politicsNational politicsMore>>

  • Gay Kentucky man loses bid to challenge GOP clerk Kim Davis

    Gay Kentucky man loses bid to challenge GOP clerk Kim Davis

    Tuesday, May 22 2018 8:07 PM EDT2018-05-23 00:07:36 GMT
    Tuesday, May 22 2018 9:36 PM EDT2018-05-23 01:36:08 GMT
    (AP Photo/Adam Beam, File). FILE - In this Dec. 6, 2017, file photo, David Ermold, right, files to run for Rowan County Clerk in Kentucky as Clerk Kim Davis look on in Morehead, Ky. Ermold, a gay man in Kentucky, wants to run against the county clerk w...(AP Photo/Adam Beam, File). FILE - In this Dec. 6, 2017, file photo, David Ermold, right, files to run for Rowan County Clerk in Kentucky as Clerk Kim Davis look on in Morehead, Ky. Ermold, a gay man in Kentucky, wants to run against the county clerk w...

    A gay Kentucky man has lost his bid to challenge GOP clerk Kim Davis, who went to jail three years ago for denying him and others marriage licenses despite a historic U.S. Supreme Court decision.

    More >>

    A gay Kentucky man has lost his bid to challenge GOP clerk Kim Davis, who went to jail three years ago for denying him and others marriage licenses despite a historic U.S. Supreme Court decision.

    More >>
  • Australian state government proposes protecting wild horses

    Australian state government proposes protecting wild horses

    Monday, May 21 2018 7:11 AM EDT2018-05-21 11:11:59 GMT
    Tuesday, May 22 2018 9:34 PM EDT2018-05-23 01:34:18 GMT
    An Australian state government has decided to legally protect rather than kill thousands of wild horses, infuriating scientists who argue the feral species is doing severe environmental damage to the country's...More >>
    An Australian state government has decided to legally protect rather than kill thousands of wild horses, infuriating scientists who argue the feral species is doing severe environmental damage to the country's iconic Snowy Mountains alpine region.More >>
  • The princes, the president and the fortune seekers

    The princes, the president and the fortune seekers

    Tuesday, May 22 2018 12:13 AM EDT2018-05-22 04:13:57 GMT
    Tuesday, May 22 2018 9:34 PM EDT2018-05-23 01:34:01 GMT
    (AP Photo/Evan Vucci, File). FILE - In this May 20, 2017, file photo, President Donald Trump shakes hands with Saudi Deputy Crown Prince and Defense Minister Mohammed bin Salman in Riyadh. In emails obtained by The Associated Press, George Nader claims...(AP Photo/Evan Vucci, File). FILE - In this May 20, 2017, file photo, President Donald Trump shakes hands with Saudi Deputy Crown Prince and Defense Minister Mohammed bin Salman in Riyadh. In emails obtained by The Associated Press, George Nader claims...

    A top Trump fundraiser and a senior adviser to a UAE crown prince ran a secretive campaign, trading lobbying against Qatar for defense contracts from Gulf countries.

    More >>

    A top Trump fundraiser and a senior adviser to a UAE crown prince ran a secretive campaign, trading lobbying against Qatar for defense contracts from Gulf countries.

    More >>

(RNN) - As student loan borrowers are getting crushed under massive student debt, the federal government's student loan program is set to turn about $51 billion in profit, according to predictions from the Congressional Budget Office.

The Department of Education's profit total is more than what Exxon Mobil, the world's most profitable corporation, made last year, according to a comparison by the Huffington Post.

The energy giant posted $44.9 billion in 2012, which was just $300 million short of the all-time annual earnings for any company, which was achieved by Exxon Mobil in 2008.

The interest rate on federal student loans is set to double to 6.8 percent this summer, which is one of the reasons the government is set to enjoy big profits from student loans.

The national student loan debt between private and government loans has exceeded $1 trillion, making it the second-largest debt in the country. Only the mortgage loan debt is higher. However, government student loan debt is less flexible because borrowers are not allowed by law to default.

News of profits exceeding the world's richest corporations comes at a time when many are calling for lower interest rates or freezes on what borrowers have to pay.

Sen. Elizabeth Warren (D-MA) has been one of the most vocal proponents of lowering interest rates, and she has garnered much support for her plan to lower government student loan interest rates to the same rate that big banks borrow government money: 0.75 percent.

"Right now, a big bank can get a loan through the Federal Reserve discount window at a rate of about 0.75 percent. But this summer, a student who is trying to get a loan to go to college will pay almost 7 percent," Warren said in a speech she gave on the Senate floor recently.

She added: "In other words, the federal government's going to charge interest rates nine times higher than the rates they charge the biggest banks - the same banks that destroyed millions of jobs and nearly broke the economy. That isn't right."

An online petition in favor of Warren's plan to reduce government student loan interest rates to the same rate as big banks has garnered more than 250,000 signatures.

Despite the massive support for Warren's plan, others say it does little to address the student debt problem because it would only apply to new borrowers and last for one year, until a new solution is found.

"We're already in a $1 trillion student debt hole and today's graduates are entering a less-than-stellar job market with an average $26,000 worth of student loan debt. We bet they would appreciate a break on interest rates, too," Business Insider reporter Mandi Woodruff wrote.

Although student borrowers have been struggling to pay back loans, the Department of Education has made nearly $120 billion in profits over the past five fiscal years, Huffington Post reported.

Copyright 2013 Raycom News Network. All rights reserved.

 

Powered by Frankly