Student loan interest generates $51 billion revenue

Student loan interest is the most profitable product our nation has. With the number of students attending college on the rise, so also increases the number of loans that are taken out to finance higher education. Originally projected at roughly $40 billion in revenue, the latest data released from the Congressional Budget Office indicates that those figures now stand at a shocking $51 billion. To compare, Exxon Mobil posted $44.8B in 2012, Apple enjoyed $40B that same year. It doesn’t stop there, as investment banksare enjoying record low interest rates on loans from the Federal Reserve, and even loan that money back to the Fed at a higher interest rate than they themselves borrowed it at.

All the while, students are locked in at interest rates many magnitudes higher. Big Banks can secure as low as 0.07% interest on loans, a number which has steadily declined from higher than 15% in 1981 all according to the CBO release. Students are handed the greatest debt they will acquire in the whole of their lives at fixed interest rates from 3.86% to 6.41%. With minimum payments, a student can avoid defaulting on the loan. The overall debt of the loan increases because of exorbitant interest rates. This often results in years of dutiful repayment with debt still remaining that exceeds both the principal loan and sum of payments made.

There is an inverse correlation between education level and unemployment rates

Education pays, everyone knows that. But does it pay well enough to surpass the crushing weight of student loan interest payments? Walmart could have ten thousand applicants for a handful of positions. There is still the sad fact that the cost of education is rising faster than the income gained from the jobs it opens up.

Higher education should not be a luxury afforded only to those who have enjoyed financial liberty their entire lives. It should be a tool that we can provide to our children, and to our nation. With a highly educated workforce we can continue to be a world leader in innovation and technology. Learning should not be easy, but that should apply to curriculum, not finances. Perhaps we could have already cured cancer, if that young genius had been able to afford a college education that would have put him in a lab doing the work he prefers. Maybe we would have Marty McFly’s hoverboard, if a brilliant young mind had been able to afford the education.