It’s almost June 21. You can count on warmer weather, a hurricane or two, and (if I’m lucky) Lebron James ending the season without a trophy in hand. Ahhhh, the joys of summer! As surely as I’ll be grilling this weekend, I’ll also be paying more for gas.
Darn big oil and their massive profits!!
It makes one wistful, recalling the heady days of just a year ago. The Occupy Wall Street movement was in full swing. Parks filled with iPhone-using throwbacks to another era. Men and women linked together in solidarity against “The Man!” (Still, apparently, a middle-aged white guy with a high paying job and all of the trappings that go with it). They had simple requests: corporations out of politics, better jobs, more money, less income disparity, an end to capitalist greed! Oh, and if you could just go ahead and wipe-out all student loan debt that would be great.
Fast forward twelve short months. According to David Jesse at the Detroit Free Press, “The U.S. government projects to make more money off student loans this fiscal year than ExxonMobil, Apple, J.P. Morgan Chase or Fannie Mae made on their respective businesses last year, a new analysis shows.”
So much for big oil.
And just where is all of that money going? Some pays down the debt. Some goes to fund the Pell Grant scholarship program. This year’s magic number is $8.7 billion. That’s the amount of student loan interest going to fund the Affordable Care Act.
That’s right, graduate. Remember a few years back when you demanded free healthcare for all? Remember how all of those negative Nellies told you “nothing is free?” I bet you’re wishing you took a few more Economics classes instead of double majoring in Women’s Studies and International Poetry.
It’s about to get worse. On July 1, student loan interest rates will increase from 3.4% to 6.8%. While Congress and the President have all said they don’t want rates to increase, none have taken any measurable steps to stop the inevitable. Two Senate bills, one Republican and one Democrat, both failed. It makes you wonder if the government really wants to stop the increase. They have 21 billion reasons not to. That’s how much the CBO estimates there will be in additional profits this year if the rate jumps.