Quote:
Originally Posted by jimbomaybe
does not the interest rates depend on the likelihood of default? , if banks could not adjust for that could they stay in business ?
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Yes, that is why the typical student loan is a direct loan from the Federal Government. Banks are not involved. Nobody cares if the borrower defaults because it is just taxpayer money, and the Government can raise taxes or borrow more money and increase the national debt. The current student loan debt is 1.6 trillion dollars and growing every day.