Private Student Loans Are Likened to Subprime Mess
Wagner, Daniel, St Louis Post-Dispatch (MO)
WASHINGTON - Risky lending caused private student loan debt to balloon in the past decade, leaving many Americans struggling to pay off loans that they can't afford, a government study says.
Private lenders gave out money without considering whether borrowers would repay, then bundled and resold the loans to investors to avoid losing money when students defaulted, according to the study released Friday.
Those practices are closely associated with subprime mortgage lending, which inflated the housing bubble and helped bring about the 2008 financial crisis.
"Subprime-style lending went to college, and now students are paying the price," said Education …
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Publication information: Article title: Private Student Loans Are Likened to Subprime Mess. Contributors: Wagner, Daniel - Author. Newspaper title: St Louis Post-Dispatch (MO). Publication date: July 22, 2012. Page number: E2. © 2008 St. Louis Post-Dispatch. Provided by ProQuest LLC. All Rights Reserved.
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