The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Congress Preys on Students for Profit

Aug 5, 2013

At the end of July, the U.S. Senate was patting itself on the back for resolving the dispute over how much college students would pay for loans.

At first, Congress threatened to double the rate students would pay, going from 3.4% on student loans to 6.8%. Then they proposed 3.8% on loans – as if they were giving students a gift. The reality is that the current rate is tied to the “market,” meaning when bank interest rates rise, the cost of the loans will also go up. In fact, the cost of loans could go as high as 8.25% for undergraduates and 10.5% for graduate students.

These changing loan rates are just like the mortgage scam being played out 5five or ten years ago – the changes benefit the banks, not the person owing money. The average student debt in 2012 was $28,720 and whether a student gets a job after college or doesn’t, or even if a student goes bankrupt – the college loan MUST be paid back.

That’s what Congress really has done to students today. And why? Because it is profitable for the U.S. government. Last year the government gained more than 50 BILLION dollars in profit from all student loans – higher than the profits of ExxonMobil.

These loan profits go straight to the wealthiest – in the form of tax breaks given by both the Bush and Obama administrations as they rip off the student population.