For Profit college loans default at the same rate as subprime mortgages
I'm actually drawing a quite different lesson here. The big story in the mortgage world was the fraud in the securitization process, i.e., the people who were bundling mortgages were incented to get anyone to sign up for a mortgage, whether they could afford one, needed one, or not. Hence the proliferation of NINJA loans, etc.
Given that these loans are backed by Ye Old Gummint, what is to prevent lenders from basically repeating this, and getting anyone they can to sign up for a loan?
No wonder the default rates are similar....
Given that these loans are backed by Ye Old Gummint, what is to prevent lenders from basically repeating this, and getting anyone they can to sign up for a loan?
No wonder the default rates are similar....
Comparing the Numbers on Subprime Mortgages and For-Profit College Loans
News from the Department of Education: The U.S. Department of Education today released the official FY 2009 national student loan cohort default rate, which has risen to 8.8 percent, up from 7.0 p......(more...)
Comments