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by mikestew
2782 days ago
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Why doesn't the lender require the borrower to explain how they plan to repay? No lender ever asks that. Lenders ask themselves, "how will I be repayed? And in the case of default?" In most cases, the answers are "by the borrower" and "take the house or car, the sale of which will offset some of the loss". In the case of student loans, the answer to the second question is "the U. S. government will pay it, in cash". There is zero incentive to determine how the borrower will repay. |
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No, it's not. While private student loans are still offered (sometimes, by predatory scammy for-profit schools themselves), none of them for quite a few years have been government guaranteed.
The former government guaranteed loan program has for some time had exactly one lender by law, the federal government itself.