This PDF 1.3 document has been generated by Word / Mac OS X 10.11.6 Quartz PDFContext, and has been sent on pdf-archive.com on 24/07/2017 at 01:21, from IP address 71.125.x.x. The current document download page has been viewed 103 times.
It is possible that government-subsidized interest rates on Stafford loans will result in students taking out larger loans.
The government artificially lowered interest rates for banks to inspire economic activity.
Banks borrowed a lot of money and offered their clients artificially manipulated low interest rate loans.
Newly qualified low-income people took out large loans (subprime mortgages).
Those people invested in the housing market, falsely believing it is a guaranteed safe investment.
Banks falsely believed everybody will pay their mortgages.
The housing market inflated too much too quickly, causing the rate of inflation to become unsustainable.
The housing market stopped appreciating in value, causing the bubble burst.
than expected and their income was too low to compensate for that loss.
People filed for bankruptcy and foreclosure, so lending agencies were not getting paid.
Cash strapped, the government had to bail out the banks.
The government is subsidizing interest rates on Stafford loans at a level that is unsustainable.
Students from low-income families now qualify for low-interest rate loans that the government artificially manipulated.
Stafford and non-subsidized private student loan agencies are loaning out lots of money to students in every major.
Without proper financial advice, and with such easy access to lots of cash, students are taking out huge loans.
With their students having so much money available to borrow, colleges are raising tuition costs at astronomical levels.
Students in every major are forced to borrow more money to pay the higher tuition.
The preceding facts are happening now. If the following happens it will most likely create a dangerous economic bubble.
(a college degree) a less valuable investment than anticipated.
Student loan interest rates eventually increase to their normal levels while the cost of tuition remains high.
1. Students continue to go to college while incurring lots of debt, with high payments due soon after graduation.
loan payments while becoming even further in debt.
2. Students drop out of college because they cannot afford it. Colleges lose income they were expecting.
interest rate for incoming students.
money needed to pay for the tuition hikes enacted when colleges were getting so much student loan money.
able to sustain operations. This is when the bubble will burst. Nobody involved wins.
This file has been shared by a user of PDF Archive. Document ID: 00627762.