April 16, 2014
The U.S. Department of Education is forecast to generate $127 billion in profit over the next decade from lending to college students and their families, according to the Congressional Budget Office.
Beginning in the 2015-16 academic year, students and their families are forecast to pay more to borrow from the department than they did prior to last summer’s new student loan law, which set student loan interest rates based on the U.S. government’s costs to borrow. The higher costs for borrowers would arrive at least a year sooner than previously predicted.
James Kvaal, a top White House official, last year dismissed the possibility that student borrowers would pay higher costs under the new law. The Consumer Protection Financial Bureau on Monday warned borrowers about a “jump” in rates.