Private Loans Deepens Student Debt
Sun 10 Jun 2007 – 12.11
The NY Times has a lengthy feature article aboutu Student Debt, more specifically the Private Loans that most students are faced with as a method of paying for an education.
The problem this time around isn’t soley the rising costs of University tuition. In addition, there is a wave of new Federal De-Regulation on the financial services industry, and of course the recent actions that cut funding for all sorts of government-sponsored (low-interest) loan programs. For example:
Unlike federal loans, whose interest rates are capped by law — now at 6.8 percent — [private] loans carry variable rates that can reach 20 percent, like credit cards … And while federal loans come with safeguards against students’ overextending themselves, private loans have no such limits. Students are piling up debts as high as $100,000.
Ouch. The story goes on to highlight some twentysomethings who are down on their luck moneywise. There are graphs and everything, which makes this a very thorough read. Fair warning, if you read this article, your blood pressure will likely rise a bit — unless of course you have zero debt, in which case maybe you should head over to tiffany.com and buy some useless shiny crap.
posted by Scott in education,personal finance.