[SideQuark]

Without this protection loans become more costly since you'd move risk to lenders. Where else can an 18 year old get an unsecured loan for this amount and rates? Nowhere, for good reason.

[dmm]

> Where else can an 18 year old get an unsecured loan for this amount and rates? Nowhere, for good reason.

If schools competed on price, prices would be lower.

[red-iron-pine]

if kids couldn't get loans, they would have to compete on price.

as it stands now, there is no economic incentive to compete on price.

[SideQuark]

Schools most certainly compete for students, and a major factor is price.

Loans are not some boogey man whose simple presence suddenly throws out all cost consciousness.

If you look at surveys of biggest concerns about students (and their parents) selecting colleges, cost is the biggest factor (42% of them put this as #1 in the survey I'm looking at).

So no, loans are not letting prices run free by any means.

[nobodyandproud]

Private lenders used to do this.

The Federal interest payments gave a stream of income to the lender.

But I thought in decades past someone used to assess the risk of someone not repaying, and limit the amount.

Or was it always a small amount no matter what? I remember not being able to afford even the state schools, even with the loans and meager scholarships.

This is in the early 1990s.

[vinyl7]

Price will have to come down so the risk isn't so bad