According to the Associated Press, a Government Accountability Office report indicated that the federal government has made $66 billion in profits from student loans originated between 2007 and 2012.
The report angered many politicians, who said the money was obscene. A previous Congressional Budget Office report estimated that the government would pocket an additional $185 billion in profits on new student loans made over the next 10 years, according to the AP.
“This is obscene. The government should not be making $66 billion in profits off the backs of our students,” Sen. Elizabeth Warren said in a statement. “This report reinforces what we already knew — instead of investing in our children and their futures, the government is squeezing profits out of our young people and adding to the mountain of debt they will spend their lives struggling to repay.”
According to the AP, Warren and other U.S. senators have committed to “wring government profits out of student loans and address a $1.2 trillion in outstanding student loan debt they say is crushing families and putting a strain on the economy.”
“We cannot bury our heads in the sand and pretend the profits don’t exist, or use accounting tricks to make them disappear,” Warren said. “It’s time to end the practice of profiting from young people who are trying to get an education and refinance existing loans.”
Warren said that the debt levels facing graduates are suffocating the economy and limiting spending by the public.
Where Can I Find a Maryland Student Loan and Bankruptcy Lawyer?
As we have mentioned several times in past blog posts, it is ridiculous that the federal government is making billions of dollars off student loans while people are struggling financially to repay them. Unfortunately, student loans are very hard to discharge in bankruptcy, but this may be changing.
A HuffPost column from last year reported that according to 2012 bankruptcy data, 47 percent of federal student loans were discharged in full, 21 percent resulted in a better payment and 12 percent settled for less than was due in bankruptcy cases.
For many student loan borrowers, a Chapter 7 bankruptcy could help discharge credit card debt, medical bills and unsecured personal loans, which could help free up money to make student loan payments. A Chapter 13 bankruptcy can also help debtors by allowing them to enter into a repayment plan, which allows you to repay your debts based upon your income.
If you are stressing or underwater financially because of student loans, contact our Washington DC and Maryland bankruptcy lawyer to learn more about whether you should file bankruptcy.Call us today at (202) 483-6070 if you have issues with debt.
Law Firm of Kevin D. Judd
Judd’s Judgment: Residents of Washington D.C. had an average student loan debt amount of $22,106 in 2012.