Those darn student loans

Sen Sanders is at it again, Tweeting about a cause and misleading about the issue and the facts and missing the core problem.

Turns out whether government makes or loses money depends on the accounting method used and both method’s results are published. In addition, even the make money on interest scenario is primarily on graduate degree loans. One estimate has the “profit” at a mere $1.5 billion a year. As a reference, government pays the Social Security Trust about $88 billion a year in interest.

But isn’t the real issue not loans and interest, but why college costs what it does and why the process to obtain a degree is so inefficient and why we allow borrowing for degrees that offer minimal employment and earning prospects (find a better way to pay for these).

We need to drive the cost discussion as if there were no federal loans.

One comment

  1. I doubt that this program has ever or will ever made a profit. If this program did make a profit, it would become a cash cow and be exploited by the politicians to fund their other pork projects. Beside, $1.5b did not cover the $1.6b cost of administering the Federal Student Aid program in FY2016.

    Click to access FY_2016_Annual_Report_508.pdf


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