Slate’s Jordan Weissman has an interesting story on CBO’s projections for the profitability of the three main federal direct student lending programs. The projections are reasonably big — about $15 billion per year, of which $12 billion comes from graduate (including law school) loans. That’s about the same money we currently give up by allowing homeowners to deduct the cost of their mortgages (see here and scroll down to p. 35). Does that combination of borrowing rules make sense? Should government profit off of some people to give a tax break to others?
I think of the student loan programs as a really big bake sale.