A doubling of student loan interest rates that happened on July 1, 2013 primarily benefits Wall Street investment banks such as JP Morgan and Goldman Sachs. These companies buy the student loans (which remain in the hands of Sallie Mae as the paid service provider). The companies then issue bonds backed by the student loans, and sell them to rich investors, hedge funds, investment banks, corporations and such. These banks and others get billions of dollars in fees every year from new student loans.
The more interest students are forced to pay, the higher the bonds can sell for, and the more attractive they are to investors, especially since they’re guaranteed by the government. In other words, America‘s higher education policies are intended to redistribute the income of the 99 to the 1 percent via higher student loan interest rates.
This shows how corrupt the US government and both political parties are; almost, and perhaps all, of the economic policies, or anything that touches on economics and finance, that has been legislated by the federal government during the last thirty years, has redistributed trillions of dollars of income from the 99 to the 1 percent every year.
Meanwhile, the federal government and the Federal Reserve have given tens of trillions of dollars to rich investors, investment banks and hedge funds to bail them out when their stupid investments turned out to be bad. This is a rigged game that shows how the government acts a corrupt conduit for a parasitic class of 1 percent.
John Hively's Blog: News and Analysis of the War Against the Middle Class 