DiscussMormonism.com

I did not know this was how it operated:

“We shall call it the Perpetual Education Fund. … From the earnings of this fund, loans will be made to ambitious young men and women, for the most part returned missionaries, so that they may borrow money to attend school. Then when they qualify for employment, it is anticipated that they will return that which they have borrowed together with a small amount of interest designed as an incentive to repay the loan” (“The Perpetual Education Fund,” Liahona, July 2001, 60; Ensign, May 2001, 51).

So donations made go into an interest generating investment.
This interest is loaned to students, who have to repay the principal sum plus interest incurred over the duration of the loan.
The Church earns money of the donations and interest of loaning out the interest from the donations. That somehow feels wrong to me - but I'm concious that I can be overly cynical so can anyone put a more positive slant on this?

rather than cynicism, you may be guilty of making too many assumptions.
http://pef.LDS.org/pef/faqhome?locale=eng
the fund's earnings or "profit", and the contributions, are put back into the fund and the entire administrative costs of that fund are paid by the church, not the fund.
The fund is supported through donations intended for the fund (as opposed to taking money from fast offerings, etc..)

So, the manner by which you have chosen to "slant" this fund leaves little wonder as to why you would feel it was wrong, but the only thing wrong is your slant.

Now if we could get a bi-annual report of all financial dealings of the church...