Government makes billions of dollars on student loan borrowers

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EAU CLAIRE, Wis. (WEAU) -- Auditors say the Federal Government will make a record profit this year on student loan borrowers. That profit of 51-billion dollars is more than the nation's most profitable companies brought in last year.

UW Eau Claire says 70 percent of its graduating seniors rely on financial aid. They borrow it from the government or private banks.

Charlotte Kubista is a senior at UW Eau Claire. She graduates on Saturday. But besides leaving her rented house, she will leave the university thousands and thousands dollars in debt.

“As of today, which is still accruing interest, I have 53,911 dollars to pay back,” said Kubista.

UW Eau Claire’s Financial Aids Office said last year 1,470 students have taken out some sort of government based loan. That puts the average debt for each student who borrowed government money 21, 586 dollars.

“I understand that you need to charge interest and I understand that those things need to be paid back, the amount of interest however, I don't think that United States government should make money of educating its young though,” said Kubista.

Financial aid counseling is offered to the students online through the university, but today they say they still don't know how much they will be paying back.

“It's not until you get the bill, or you get the letters, when you're like, where did this come from?” said super-senior at UW Eau Claire Carissa Brooks.

As tuition and interest keep rising, students say sometimes it's hard to make ends meet.

“Knowing that I'm contributing to patting pockets, I feel a little taken advantage off,” said Kubista.

But still, Kubista says all things considered, she is happy with the cost and quality of her education.

“As of right now I believe I've received an excellent education and worth every penny of it. Paying it back and going forward I don't know, but ask me in three years, when I have to pay those loans,” laughs Kubista.

The Federal Government is working on a piece of legislation that would keep interest rates on new government-backed Stafford loans from doubling on July 1st.

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