As Students Drown in Debt, Gov’t Rakes in $42 Billion in Profit
Education Secretary Arne Duncan. (Associated Press)Arne Duncan’s Department of Education is making a killing from student debt.
A report in Monday’s Huffington Post reveals that, in the fiscal year ending September 30th, 2013, the DoE raked in $42.5 billion in profit from federal student loans—marking its second highest profit margin ever.
The DoE appears to have become dependent on this windfall from student loans to pad its coffers. According to The Huffington Post,
In a sign of just how important student loan profits have become for the Education Department’s bottom line, its reported gains off lending to students and their families over the last year comprised nearly half of the agency’s total outlays, the biggest share since at least 1997.
Last year, profits from student loans surpassed funding for the Pell Grant given to low-income college students.
Education Secretary Arne Duncan has come under fierce criticism shielding the country’s largest private lender to students—Sallie Mae— from accusations of breaking federal law and contracts, including lobbying with ALEC to block student loan reform. He has also been slammed for supporting a bipartisan student loan bill that critics charge does nothing to address the spiraling student debt crisis or the high principle they are forced to pay.
As Matt Taibbi writing for Rolling Stone explains, following the Great Recession of 2008, states slashed funding to higher education, yet costs for students kept rising. The average student today graduates 27,000 dollars in debt. This is in an economy where, according to a 2012 analysis by the Associated Press, 50 percent of college graduates under the age of 25 are either unemployed or working jobs that don’t require a college degree.
“This is fundamentally about our values and what kind of country we want to be,” said Sen. Elizabeth Warren (D-Mass.) speaking previously about the student debt crisis. “With college costs exploding and students being crushed by more than a trillion dollars in debt, I believe we should invest in our students — not make obscene profits off them.”
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Source: Common Dreams
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