By C, and ice Bernd
May 17, 2013
Caption : The Obama administration is expected to gain a $51 billion profit this year from returns on student loans, a sum bigger than the what the nation's most profitable company earned this year.     

What's greater than the sum of the nation's most profitable companies and roughly equal to the 2012 earnings of the four largest banks in the nation?

The Obama administration's expected $50 billion profit from student loan borrowers.

The Congressional Budget Office (CBO) released figures this week showing the agency increased its fiscal year profit forecast for 2013 for the Department of Education by 43 percent to $50.6 billion, according to the Huffington Post.

That's an increase from its previous estimate in February of $35.5 billion; more than the nation's most profitable company—Exxon Mobil.

Hitting more than $1.1 trillion, student debt keeps breaking records over other forms of debt in the nation's market economy. But as the Department of Education racks up nearly $120 billion from returns on student loans, what's being done to rescue students—and prevent student—from drowning in debt?

Senate Democrats introduced new legislation Wednesday to keep the current interest rate on federal Stafford loans from doubling come July 1, extending the current rate for two years.

And President Obama asked Congress to tie interest rates on student loans to the government's costs of funding the program.

But the Consumer Financial Protection Bureau and regulators at the Federal Reserve and Treasury Department have all made warnings to the Obama administration about how more needs to be done to manage this type of debt, which cannot be eliminated upon bankruptcy.

Many officials are forecasting that student loan debt will continue to contribute to serious financial instability, and the marker in profits from the CBO only drives the point home.

More than a quarter of a million people are backing the idea that Congress should give students the same interest rate deal that is currently offered to big banks through the Fed. More than 250,000 people have signed a petition by Sen. Elizabeth Warren that would cut interest rates on federal Stafford loans to 0.75 percent from their current 3.4 percent rate.

Approximately 7 million people will be impacted by the Stafford student loan interest rate hike if nothing's done before the July 1 deadline, but lawmakers, bureaus and youth advocacy groups are all calling for long-term solutions.

Options like refinancing and introducing income-based repayment models in the private education loan industry have been a few of the recommendation to upend the student debt crisis floating around but it's up to Congress to parse out what what will work for the 38 million Americans nationwide who suffer under the weight of student loan debt.

Correction: An earlier version of this article incorrectly reported how information about the comparison to banks was calculated; it refers to the four largest banks by earnings, not by income in assets. We regret the error.

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