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04-30-2012, 05:46 PM
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Originally Posted by Vonnegut99 View Post
The issue is that if the downside is not guaranteed, there is no reason for them (Banks) to loan you, as a student, money. With high dropout levels amongst students and often degrees which yield low paying jobs, no collateral, what incentive would the bank have to loan you any money at all?

In situations where an institution has to do something outside of its interest, there is always a concession that needs to be made for their involvement. Same reason charitable donations are tax deductible. I wont comment on the extent of the guarantee on the loans as I have not read up on the terms of the payout by the government.
it's not just a concession... they take ZERO risks and get all the "profits"...

they get their money back with interest, even if the student doesnt reimburse a dime on the loan.

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