Check out these five great laptop bags for students.More >
Check out these five great laptop bags for students. More >
(RNN) - As student loan borrowers are getting crushed under massive student debt, the federal government's student loan program is set to turn about $51 billion in profit, according to predictions from the Congressional Budget Office.
The Department of Education's profit total is more than what Exxon Mobil, the world's most profitable corporation, made last year, according to a comparison by the Huffington Post.
The interest rate on federal student loans is set to double to 6.8 percent this summer, which is one of the reasons the government is set to enjoy big profits from student loans.
The national student loan debt between private and government loans has exceeded $1 trillion, making it the second-largest debt in the country. Only the mortgage loan debt is higher. However, government student loan debt is less flexible because borrowers are not allowed by law to default.
News of profits exceeding the world's richest corporations comes at a time when many are calling for lower interest rates or freezes on what borrowers have to pay.
Sen. Elizabeth Warren (D-MA) has been one of the most vocal proponents of lowering interest rates, and she has garnered much support for her plan to lower government student loan interest rates to the same rate that big banks borrow government money: 0.75 percent.
"Right now, a big bank can get a loan through the Federal Reserve discount window at a rate of about 0.75 percent. But this summer, a student who is trying to get a loan to go to college will pay almost 7 percent," Warren said in a speech she gave on the Senate floor recently.
She added: "In other words, the federal government's going to charge interest rates nine times higher than the rates they charge the biggest banks - the same banks that destroyed millions of jobs and nearly broke the economy. That isn't right."
An online petition in favor of Warren's plan to reduce government student loan interest rates to the same rate as big banks has garnered more than 250,000 signatures.
Despite the massive support for Warren's plan, others say it does little to address the student debt problem because it would only apply to new borrowers and last for one year, until a new solution is found.
"We're already in a $1 trillion student debt hole and today's graduates are entering a less-than-stellar job market with an average $26,000 worth of student loan debt. We bet they would appreciate a break on interest rates, too," Business Insider reporter Mandi Woodruff wrote.
Although student borrowers have been struggling to pay back loans, the Department of Education has made nearly $120 billion in profits over the past five fiscal years, Huffington Post reported.
Copyright 2013 Raycom News Network. All rights reserved.
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