image by flickr user jparise (cc license)
Over the past year, there have been multiple accounts of how much the federal government profits from its student lending. This week, the Congressional Budget Office announced that those profits project to continue through 2024.
This story on the Chronicle of Higher Education’s website provides some great detail. Last year’s congressional bills that altered (read: raised) the interest rate for college student loans seems to have increased the profitability of fedeal student loan programs. While the interest rates will actually decrease the near-term profitability of the program, the program will end up generating an additional $9 billion over the next 10 years.
Perhaps the best news from this report is that Pell Grants seem to be in much better financial shape than previously thought. Earlier projections showed Pell Grants hitting a shortfall in 2015 and a steep loss of $5.8 billion in 2016. Now, Pell Grants actually will be ‘in the black’ throughout 2015 before facing only a shortfall of $1 billion in 2016.
You can read the whole CBO projection for the federal budget and economic outlook through 2024 on the CBO website.