Federal government books $41.3 billion in profits on student loans

<p>[Federal</a> government books $41.3 billion in profits on student loans | Detroit Free Press | freep.com](<a href=“http://www.freep.com/article/20131125/NEWS05/311250021/Federal-government-profits-on-student-loans]Federal”>http://www.freep.com/article/20131125/NEWS05/311250021/Federal-government-profits-on-student-loans)</p>

<p>"The federal government made enough money on student loans over the last year that, if it wanted, it could provide maximum-level Pell Grants of $5,645 to 7.3 million college students.</p>

<p>The $41.3-billion profit for the 2013 fiscal year is down $3.6 billion from the previous year but still enough to pay for one year of tuition at the University of Michigan for 2,955,426 Michigan residents."</p>

<p>No they dont profit. Its all in the accounting. </p>

<p>If the government used the same accounting method that banks do for loans they are loosing money:
[No</a>, the federal government does not profit off student loans (in some years ? see update)](<a href=“http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/20/no-the-federal-government-does-not-profit-off-student-loans/]No”>http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/20/no-the-federal-government-does-not-profit-off-student-loans/)</p>

<p>another pov:</p>

<p>My personal favorite is the typical assumption that government workers/loan processors are “free” (see bolded).</p>

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<p>[How</a> Much Money Does the Government Really Make From Student Loans? - Andrew P. Kelly - The Atlantic](<a href=“How Much Money Does the Government Really Make From Student Loans? - The Atlantic”>How Much Money Does the Government Really Make From Student Loans? - The Atlantic)</p>

<p>You didn’t even bother to read the article. </p>

<p>These loans do not produce anything close to a net profit and are a massive subsidy to colleges.</p>

<p>The fact that people think even for a second that unsecured consumer debt at ~3.5% is profitable with ~12% DLQ rates just shows how badly people need basic finance classes.</p>

<p>^^actually,what is shows is that journalists should be required to take both statistics and finance. :D</p>

<p>should the federal government be subsidizing schools like this? they are already non-profits…</p>

<p>The “profit” is really taxes that are used to redistribute tuition dollars to other citizens. The rich are full-pay. The middle-class takes on debt - the “profit” from the government loans is spent in accordance with the dictates of politicians who distribute the money to other citizens.</p>

<p>^actually, when the current rates were set, they were set specifically high as to be able to support the expansion of the Pell Grant program.</p>