Education Department’s project net income to a record $51 billion, directly related to huge student debt levels at large interest rates.
" The Huffington Post reported that the $1.1 trillion in outstanding student-loan debt had generated about $120 billion in profit payments to the department over the past five years, based on interest rates at 6.8 percent to 7.9 percent. "
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experts say soaring student loans could dampen consumption, limit credit creation, and pose a threat to financial stability, according to The Huffington Post.
How can you buy a house with huge student loan debt payments?
Democratic senators proposed a bill Tuesday that would lock in the current low interest rate, 3.4 percent, on loans for the poorest households, while helping a small portion of borrowers who take out loans in the next two years.
But the legislation would do nothing to address existing student debtors, the Huffington Post reported.
"Today’s figures from the CBO underscore the urgent need for Congress to prevent the July 1 interest-rate hike and address the crushing debt placed on students," said Tiffany Edwards, spokeswoman for Democrats on the House Education and Workforce Committee.