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Federal student loan guarantees and subsidies complicate the economics. Lenders are prepared to provide larger and riskier loans than the marker would otherwise
by dodobirdlord 7y ago
Federal student loan guarantees and subsidies complicate the economics. Lenders are prepared to provide larger and riskier loans than the marker would otherwise support. Universities can handle only a limited number of students, so they have no incentive to lower prices until it would result in a marginal slot going unfilled.
- dragonwriter 7y ago> Lenders are prepared to provide larger and riskier loans than the marker would otherwise support. The only lender that has benefitted from federal guarantees/subsidies for a number of years is...the US Department of Education. Whose lending is directed by the same laws that provide the guarantees and subsidies, and so are not incentivized by them.