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Originally Posted by dnobles
I worked in student loans. I’ve been retired 12 years and haven’t kept upon the changes. There is so much miss information in these post I don’t even know where to begin plus I don’t want to argue.
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I agree with you 100% . I was a senior exec at a large Regional Bank . One of the Business Lines that reported to me back when we did" Direct Student Lending" was the Federal Student Loan Program .
There is a lot more to the entire program than what has been discussed here . Like anything there is a great deal more to the entire issue .
Loans to students attending so called " Trade Schools " such a Cosmetology and Secretarial Business Schools had horrendous Default Rates . As high as 80% !
Yet for many years we were forced to process and advance loans to these students or it was considered Discriminatory . Not Discriminatory against the student but possibly as Discrimination toward the " School " . We also had to work hard at great expense to collect payments before we could declare a loan to be " Uncollectible " and turn it over to the Federal Government to exercise their Guarantee. Something like one year of zero payments . And on and on .
My Bank and many others put pressure on our Federal Representatives to institute some standards such as student graduation rates , ability to pass State Licensing Exams , Historic Loan Default Rates etc .
The result was the Federal Government simply took over the Student Loan process and took over the Student Loan portfolios from all Banks .
Apparently this was their answer to serious problems in the National Student Loan Program . This was many years ago however I must wonder if the standards were ever cleaned up .
" For Profit Schools " are major abusers of the system . You see them running Ads on TV every day .They put on hard recruiting practices to gather students , many who should not be in college or even Trade Schools . They have them borrow the max allowed which goes to those who own the schools and very few ever get a useful education .
Most are left with broken dreams and a huge debt .
Most people who attend legitimate Universities and Colleges and who Majored in anything close to useful eventually are able to build successful careers . Some sooner than others but the vast majority do .
Note : Back when Banks administered the loans it was The Federal Government who determined what interest rate banks could charge on student loans under that program. Also the abusive " school " operators donate a lot of money to their favorite politicians in order to keep their game going .