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The other side of it is everyone qualifies for a loan. So there's an enormous amount of risk associated with it and the interest rates do not reflect that risk.
by nemo44x 9y ago
The other side of it is everyone qualifies for a loan. So there's an enormous amount of risk associated with it and the interest rates do not reflect that risk.
It's difficult to loan 18-year olds money as they tend to lack income and credit worthiness and it's also unreasonable to expect an 18-year old to really understand the future debt they are setting themselves up for.
- StudentStuff 9y agoHence why the federal government backs nearly every student loan either directly or indirectly. None of the private banks risk their own money in this market, as the feds have happily hand them cash and encourage said banks to loan it out! This has resulted in costs spiraling out of control, as universities can charge whatever they want with minimal repercussions, and students often end up with the STD known as student loans haunting them for the rest of their lives.