Friday, May 4, 2012

Student Loan Rates - How Much Profit?

Many conservatives argue "Government should be run like a business!"

But they complain when it is.  Look at student loans.  Currently, the average rate paid for money the Government borrows is 2.187% (down from 2.370% a year ago. [1])

For student loans, the government charges 3.4% So, at the existing rate, the government is making a spread of about 1.2% - we are making money on those student loans.

That is exactly what banks do - borrow low and lend higher.  Our student loans are already a profitable "business."

But the GOP either wants to double the interest rate or "pay for" keeping it low and affordable by taking money away from other programs.  

There is no need to "pay for" the lower rate - what the GOP is pushing to do is take money from other programs if they can't make obscene profits from students.

When they say "government should be run like a business," apparently they really mean government should be run like a loan sharking business - with excessive profits screwed out from students.

Education makes our country stronger.  Why is the GOP trying to increase the cost of making our country stronger?

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