Congress is patting itself on the back for its bill to lower student-loan rates, which doubled last month to 6.8 percent, because it could not pass legislation to fix it.
But if you look closely at the bill, which is expected to be signed by President Obama as soon as tomorrow, you’ll see it’s a bipartisan fleecing of America’s middle class.
The 3.9 percent loan rate applies only to undergraduate students borrowing up to $5,500.
Graduate students pay 5.4 percent, and if you’re a middle-class parent trying to put your kid through school, it’s going to cost you 6.4 percent.
Now, if you are a parent with a child going to a private college, you are staring at a $40,000 bill payable before you pack up the U-Haul.
The $5,500 may take care of a semester’s room and board — the rest comes out of pocket or at the 6.4 percent rate.
And here’s something else: According to the Congressional Budget Office, this year Uncle Sam will make almost $51 billion in profit off the backs of the middle-class families who are putting their kids through college.
The feds have reaped $120 billion over the last five years from college loans. And the CBO estimates that they will make $184 billion more between now and 2023 on the student loans from this fiscal year alone.
That profit — essentially a hidden tax — goes to underwrite the politicians’ pet programs.
The bottom line: Outstanding student debt tops $1 trillion.
The average private college or university tuition jumped 3.1 percent last year, to $24,256, and that doesn’t include room and board or books, expenses that add $12,000 to $17,000 a year.
In-state college tuition rose 6.7 percent last year, but still represents the best bargain at $7,526, plus those added expenses. That’s still a lot of money.
There are so many things wrong with the federal government’s profiting off the backs of students and their families that it defies belief. It’s nothing better than pure, nonpartisan greed.
As everyone knows, there aren’t a lot of places that the government ever turns a profit, let alone a massive $51 billion.
But getting a college degree in America shouldn’t be a profit center for Washington.