Government Stupidity

First, a word from our elected Representatives:

Student loans were supposed to be a pathway to the American Dream, but instead they’ve become a lifetime subscription to interest payments.

Congress should CAP federal student loan interest rates at 2%.

Americans should be able to pay back what they borrowed without paying for…

— Rep. Anna Paulina Luna (@RepLuna) September 1, 2026

Let’s say she is successful at capping student loan interest at 2%. You are a lender, and you have funds to invest. You are looking for a low risk vehicle to place those funds in.

• You can invest it by lending it to a student and get 2% per year, but won’t ever be repaid your principal.
• You can buy a 12 month T-bill at 4.15%. Wash, rinse repeat
• Or a 10 year treasury note at 4.75%

The only lender who can offer 2% student loans is the Federal government, but only by subsidizing them using money they are in turn borrowing at double the rate they are lending it out at. It currently borrows at roughly 4%–5% for comparable maturities, then bears servicing costs, delinquency, default, forgiveness, and interest-rate risk. Charging borrowers 2% therefore transfers part of the loan’s economic cost to taxpayers.

Department of Education lending costs $3.3 billion each year using Federal Government accounting practices, and $15.0 billion under fair-value accounting, which incorporates market risk more fully and is the systems businesses use.

Our elected politicians have become idiots who get elected solely by promising people free shit. Noone thinks about how it will be paid for.