Re:Student-Loan Debt Is Crushing Millennials
by dragonwriter on Friday November 02, 2018 @02:42PM
(#18365554)
> Even if the government subsidized all higher education and removed the lenders from the equation completely,
Which it mostly has; private student loans dropped off a cliff with the late 2000s financial crisis, and then private lenders were cut entirely out of the federally guaranteed student loan program, which is where most loans for study at fully accredited schools come from. For guaranteed loans, the only lender is the federal government, so everyone talking about the supposed effect of federal guarantees on lender behavior is missing a very important fact.
So, the federal guaranteed loans, with below market interest, various forgiveness options, income-based repayment, etc., are basically an erratic, bureaucratically complicated, inconsistent, method of federal subsidy which excludes private lenders.
Which it mostly has; private student loans dropped off a cliff with the late 2000s financial crisis, and then private lenders were cut entirely out of the federally guaranteed student loan program, which is where most loans for study at fully accredited schools come from. For guaranteed loans, the only lender is the federal government, so everyone talking about the supposed effect of federal guarantees on lender behavior is missing a very important fact.
So, the federal guaranteed loans, with below market interest, various forgiveness options, income-based repayment, etc., are basically an erratic, bureaucratically complicated, inconsistent, method of federal subsidy which excludes private lenders.