Well, here’s a surprise from student-loan land. Not.
This, obviously, was a topic which required a bureaucratic government study, and so we got one. From it we get amazing and startling new findings, guaranteed to drop jaws … findings like these:
From 2005 – 2007, the report found that school involvement in student loans began to shrink and students began borrowing more than necessary. And, lenders began making exceptions for students with lower credit scores.
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.
Those practices are closely associated with subprime mortgage lending, which inflated the housing bubble and helped bring about the 2008 financial crisis, according to the Associated Press.
Huh. That’s weird. I know a guy who compared student-loan lending to subprime lending way back in 2010.