Dive Summary:
- A new law regulating interest rates on student loans will put more than $700 million in additional profit into the federal government’s bank account in the next 10 years, an analysis shows.
- In the short term, the law will ease the burden on student borrowers, but over the next decade it will also generate a total of $175 billion in profits, the nonpartisan Congressional Budget Office says.
- Experts say that while the new law was meant to lighten the blow to students' wallets, it was also bound to be "revenue-neutral," meaning it would have to generate the same amount of money for the government as the old, higher interest rates would have.
From the article:
... Nationally, there’s more than $1 trillion owed in student debt — more than what Americans owe on credit cards — with more than $180 billion of it in some type of default, according to government data. “If everyone else is making a killing off of us, I’m not the least bit surprised the government is angling to rake us all over the coals,” said Nick Townsend, a senior at Ferris State University. ...
