The government is losing, rather than making money on student loans

Josh Mitchell reports that

U.S. officials have long maintained the federal government would make a profit on its $1.4 trillion student loan portfolio or at least break even, but two recent reports suggest just the opposite will be the case. Government lending to college and graduate students could soon become an immense drain on federal coffers, worsening an already deteriorating U.S. budget picture…

projected that money coming in for government student loan and guarantee programs will be $36 billion short of what’s needed to cover outstanding debt and accrued interest.

A year earlier, the department projected the shortfall would be $8.4 billion, while in prior years it projected the program would generate billions of dollars in taxpayer surpluses…

the risk of a flood of red ink highlights what analysts across the political spectrum agree has become an inefficient system that for years directed funds to universities as they raised prices, with little regard for the creditworthiness of borrowers…