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To quote the article. The bank sold student loans with expected default rates at 92 percent. The bank knows exactly what they are doing. The partial repayments
by user5994461 8y ago
To quote the article. The bank sold student loans with expected default rates at 92 percent.
The bank knows exactly what they are doing. The partial repayments are enough to cover the initial principal and a good margin. The bank basically makes money on defaulting.
The abusive interest accrues too fast to ever be repaid. The loan will last for as long as the person live. This is only possible because loans cannot be discharged.
- deleted 8y ago[deleted]
- UncleEntity 8y agoThe flip side is that without government guarantees people would be complaining that college is only for upper-middle class kids who's parents can afford to pay. TFA's author goes on about how her father tried (unsuccessfully) to talk her out of taking a loan with "abusive interest" but that didn't stop her. My mom was pretty unhappy I tricked her into letting me sign up for the army at 17 but that doesn't mean there's anyone to blame but myself.