why have private banks CANCELLED their student loan programs?
Question by internet: why have private banks CANCELLED their student loan programs?
Many banks have given up on “private student loans” and are abandoning it on a daily basis.
Private student loans are now seen as “high risk investment” by all major banks and some even claim that it is equivalent to “subprime loans” of 2006 and 2007.
Private student loan for years was an alternative to federal student loan for many whose needs weren’t covered by federal loan limits (such as cost of getting tutoring, gasoline/car expenses and other miscallenous expenses which are for education but not recognized by federal government).
BofA, Citi, JP Morgan, all scrapped their “private student loan” programs. Why?
Even credit unions have given up issuing private student loans for the promising students whose career depends on education. So now these promising students are deprived of a bright future because banks won’t give them the opportunity to prosper?
On 1 hand the economy is recovering per the media, but on the other hands credit is getting harder than ever to obtain from banks? without credit, people cannot make it. Small businesses that depend on access to bank credits for expanding and hiring people, have been shut out of any chance whatsoever. How will things improve then?
For making big ticket purchases such as new house, new car, opening new business, etc etc almost everyone depends upon access to credit from banks. With the help of loan and credit, these things are made possible and that’s how economy recovers and expands. If banks are shutting down on credit or making it tighter and harder than ever to obtain, the economy simply cannot improve ever.
Sadly, credit and loan is only available to the 1% now – who don’t need credit or loan anyway. For the rest of the 99, its NOT ALLOWED. Then why did Obama and Bernanke even bother to bailout the failing banks? this is a serious question.
nowadays even people with good credit score are being denied loan. You would have to have at least a 6 digit personal income just to qualify for loan. Good luck in trying to buy your next “new house” or next new “lexus or bmw”
how painful it must be for many people to realize that they will never get the chance to buy a new lexus or new bmw in the future. they have been deprived of reliable transportation needs
bill gates or mitt romney will get any type of loan or credit from the bank, but you won’t. is that the type of America the founding fathers envisioned, where rich keep getting richer and the rest are barred?
Answer by Maryjane Dark Goddess
Because it’s a high risk loan.
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