Democratic Senators Highlight Obscene Government Profits off Student Loans

Press Release

United States Senators Elizabeth Warren (D-MA), Barbara Boxer (D-CA), Jack Reed (D-RI), Chuck Schumer (D-NY), Sherrod Brown (D-OH), Mark Begich (D-AK), Kirsten Gillibrand (D-NY), Richard Blumenthal (D-CT), and Chris Murphy (D-CT) responded to a Government Accountability Office (GAO) report released earlier today, which estimates that federal student loans originated between 2007 and 2012 will bring in $66 billion in revenue. The report follows projections released last spring and summer by the Congressional Budget Office (CBO) estimating that the federal government will bring in an additional $185 billion in profits on new student loans made over the next ten years.

The senators committed to continue advocating for students and their families to wring government profits out of the student loan program and address the $1.2 trillion in outstanding student loan debt that is crushing families and putting a strain on the economy.

"The GAO report makes clear that Congress must do a better job of pricing students loans closer to the actual cost to the government. Students and parents who borrowed at needlessly high rates should be given an opportunity to refinance at a lower rate. The bigger question that the report does not address is that the student loan programs were originally seen as an investment, not a profit center or even a cost-neutral proposition. We invested in offering low-cost loans to create opportunity, spur innovation, and grow our economy. Today, student loan debt is becoming a drag on economic opportunity and growth. We must turn the tide," said Senator Reed.

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