A Student Loan System Stacked Against the Borrower
Joyce Park stashed this in Economics
I did not realize that the student loan industry is essentially a monopoly granted by the Education Department to 11 loan servicers to whom students are assigned and from whom they cannot move even if they get substandard service.
That's right. And until recently it wasn't possible to refinance student loans, either.
Kind of amazing that the student loan system has resisted reform for so long. Too lucrative, I guess.
But really it should not be a profit center for the government.
I think the default rate is pretty high these days: 11.8% according to the Department of Education. The average amount of total indebtedness is approaching $30K.
Wow, that seems like a very high default rate.
Which means that reforming the system would be an opportunity to help a lot of people.