Student loan profits of $41.3 billion were made by the federal government last year.
The
massive profit is actually a $3.6 billion reduction from the prior year, the Detroit Free Press noted, writing that if it wanted to, the federal government could use the fund to "provide maximum-level Pell Grants of $5,645 to 7.3 million college students."
Only Exxon Mobil, which saw a $44.9 billion profit in 2012, and Apple with its $41.7 billion profit last year, exceeded the federal governments profit derived from its student loan program.
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Education Secretary Arne Duncan has rejected the characterization of the apparent surplus as a profit.
"It's actually neither accurate nor fair to characterize the student loan program as making a profit," Duncan said during a July conference call with reporters, the Free Press reported.
According to an analysis by
the Huffington Post, the government's highest ever profit from federal student loans came in 2011, when it made a gain of $47.9 billion.
Congress will be looking into the record profits the federal government has made from its student loan program in the coming months.
In the meantime, U.S. Department of Education spokesman Stephen Spector issued a statement to the Free Press on Tuesday about the issue.
"The administration has taken steps to improve college affordability, and thanks to collective efforts, students and families are paying lower rates on their loans today than they would have otherwise," Spector said in the statement. "More must be done to bring down the cost of college, and we look forward to continuing to work with Congress, institutions, borrowers, and other stakeholders to make college more affordable."
The figures come at a time when an estimated $1.2 trillion is owed in student debt across the nation, which exceeds the amount of money Americans owe on credit cards.
Massachusetts Democratic Sen. Elizabeth Warren, who is usually an ally of the administration, voiced her opposition to the profits made on student loans, the Huffington Post reported.
"This is fundamentally about our values and what kind of country we want to be," Warren said. "With college costs exploding and students being crushed by more than a trillion dollars in debt, I believe we should invest in our students -- not make obscene profits off them."
University of Michigan graduate Kelly Wilk agreed.
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"Instead of making a profit on student loans, why doesn't the government try to help out the millions of students who are struggling financially and at the very least, lower the interest rates?" Wilk told the Free Press. "I don’t understand how the government expects this generation to support themselves after graduation, starting out with a mound of debt and in a lot of areas, no job."
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