Student Loans a Threat to the Economy!
I was reading this article from AP, showcasing the problem with private student loans and the threat toward US Economic growth. This article hit a cord with me, as I am one of those people with a ‘phat’ student loan obligation. On top of the sizeable loan, a year and a half ago I realized the company holding my private loans were ripping me off. (A disturbing legal theft that gave me the urge to throw up when I realized what was going on.)
The company holding my loan clearly was taking advantage of me, making me pay far more money than a traditionl mortgage or home equity loan would have me pay. What sick fuck of a company would take advantage of kids trying to make their way into the system? On top of being taken advantage of, at the time about a third of my monthly pay check was going to pay off the debt. (That sucks)
Truly if I had Private Equity backing I would create the fairest private loan scheme available for students. Buy out a small firm that is lacking in business, but has the legal hurdles out of the way. Change the business model from ‘theft’ to ‘fairness’. The less income from the loan received from essencially stealing from kids would be made up for from the volume of the loans processed (ie market share gain). I would make the private loans straight forward and a point higher than federal loans. Make it a low margin biz, depended on volume and securitization fees on some of the loans. (Most of the loans would be kepted in house.)
I am just glad I know how to invest to have supplemental income.
My advice to any college kid reading this blog… if you have the capability, tell your parents to take out a traditional home equity loan, or long-term fixed mortgage for your college. Then pay back your parent(s).
