BOSTON (AP) - U.S. Sen. Elizabeth Warren said Saturday she is shocked that the federal government is earning an estimated $66 billion in profits from student loans originated between 2007 and 2012.
The Democrat from Massachusetts was reacting to a Government Accountability Office report Friday. A previous Congressional Budget Office report estimated that the government will pocket an additional $185 billion in profits on new student loans made over the next 10 years.
"This is obscene. The government should not be making $66 billion in profits off the backs of our students," Warren said in a statement. "This report reinforces what we already knew - instead of investing in our children and their futures, the government is squeezing profits out of our young people and adding to the mountain of debt they will spend their lives struggling to repay."
Warren and eight other U.S. senators committed to wring government profits out of student loans and address a $1.2 trillion in outstanding student loan debt they say is crushing families and putting a strain on the economy.
"We cannot bury our heads in the sand and pretend the profits don't exist, or use accounting tricks to make them disappear," Warren said. "It's time to end the practice of profiting from young people who are trying to get an education and refinance existing loans."
Warren has been fired up about student loan debts, which she said is leaving new graduates with a suffocating obligation that can stifle their futures. She has filed what she calls a "skin-in-the-game bill" that tries to pressure colleges to keep costs down for students and ensure they get a meaningful diploma when they graduate. As part of the bill, colleges that don't meet on-time graduation rates and other criteria must refund a portion of a student's loan.