It has been predicted that the Obama Administration is going to turn out a $51 billion dollar profit this year solely from returns on student loans. This amount surpasses the earnings of the most profitable companies in the United States, calling attention to the need to take action to lower the record-high interest rates on student loans.
According to the Huffington Post, the figures which were released Tuesday, are almost equal to the combined net of four of the largest banks in the country.
Our country is in an era where finding a job right out of college is a difficult and often fruitless exercise without having a bank or agency on your back. Because grads can’t easily find a job, the growing burden of high loan rates weighs even more heavily on them.
With a majority of the interest rates fixed at 6.8 and 7.9 percent, lawmakers are worried that students who are overly indebted will not have financial stability and will not be able to buy cars, purchase homes, or save for retirement.
“The whole student loan problem is a problem that should be of deep concern to this body,” said CFPB director Richard Cordray in front of the Senate Banking Committee last month.“These are young people that we should care a great deal about.”
“They’re the ones with the ambition, aspirations and dreams, and they’re getting saddled with debt that they don’t understand. It’s holding them back and it’s making them unable to rise and succeed and become leaders in our society,” Cordray added.
As of late, Sen. Elizabeth Warren (D-MASS) appears to be the crusader in the fight to lower students’ interest rates. She is the first lawmaker in a long time to make her voice loud and clear on the issue, asking that student loans be given the big-bank treatment with a bill proposing to reduce student loan interest rates to as low as 0.75 percent.
Krysta Loera is a writer and researcher with Ring of Fire. Follow her on Twitter @KrystaLoera