"The pivot toward private lending is going to deprive students of access to college and to make their choice. Either you can give up on the dream of higher education, or try to look for lenders that are increasingly predatory and offer highly predatory and expensive loans to people who are the most desperate."
"Traditional private lending limits will hurt the people who arguably would stand to gain the most from the federal student loan program because students from low-income backgrounds and students of color often have limited access to credit."
A report indicates that changes to federal student-loan repayment may lead to an increase in risky lending products. With 40% of Americans potentially denied private loans from prime lenders due to low credit, many may turn to the shadow student debt market. This market includes subprime lenders and high-interest products. New borrowing caps for advanced degrees could further drive students to seek private financing, limiting access to education for low-income and minority students, who are already disadvantaged in credit access.
Read at www.businessinsider.com
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