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.
Figures made public Tuesday by the Congressional Budget Office show that the nonpartisan agency increased its 2013 fiscal year profit forecast for the Department of Education by 43 percent to $50.6 billion from its February estimate of $35.5 billion.
Exxon Mobil Corp., the nation’s most profitable company, reported $44.9 billion in net income last year. Apple Inc. recorded a $41.7 billion profit in its 2012 fiscal year, which ended in September, while Chevron Corp. reported $26.2 billion in earnings last year. JPMorgan Chase, Bank of America, Citigroup and Wells Fargo reported a combined $51.9 billion in profit last year.
The estimated increase in the Education Department’s earnings from student borrowers and their families may cause a political firestorm in Washington, where members of Congress and Obama administration officials thus far have appeared content to allow students to line government coffers.
The Education Department has generated nearly $120 billion in profit off student borrowers over the last five fiscal years, budget documents show, thanks to record relative interest rates on loans as well as the agency’s aggressive efforts to collect defaulted debt. A spokesman from the Education Department did not respond to a request for comment. A Congressional Budget Office spokesman could not be reached for comment after normal business hours.
Chosen excerpts by Job Market Monitor
via Obama Student Loan Policy Reaping $51 Billion Profit.
Related Posts
Student Debt in U.S. Rises to $867 Billion, New York Fed Says
Debt from educational loans in the U.S. rose to $867 billion last quarter, according to the Federal Reserve Bank of New York. The total increased from $865 billion three months earlier, according to a report released today. The figure comprised both federally backed loans, which are secured by the U.S. government, and private borrowing. While … Continue reading »
Some Law Students are graduating with more than $150,000 in debt
Among 195 ranked law schools surveyed annually by U.S. News, 191 reported the average indebtedness of graduating students in 2011, the most recent figures available. Overall, law students graduated with an average of $100,433 in debt, though at some of the schools with the most heavily debt-laden students, graduates faced an average debt of more … Continue reading »
US / Students “deserve the same break that big banks get” says Elizabeth Warren
“The U.S. government invests in big banks by giving them a great deal on their interest rates,” freshman Sen. Elizabeth Warren said in an interview with Salon on Wednesday afternoon (the transcript of which is below). “We should make at least the same investment in our students.” Warren was discussing the first bill she has introduced … Continue reading »
Job Market Monitor 
Discussion
Trackbacks/Pingbacks
Pingback: US Law School / The Oversupply of law school graduates | Job Market Monitor - June 5, 2013
Pingback: US / New website to compare law-school jobs data | Job Market Monitor - July 25, 2013
Pingback: Education in US / Most States’ School Funding Tumbles Since Recession | Job Market Monitor - September 16, 2013