those private student loans -- fishy?

[grapejelly]

I have been pondering this new phenom of private student loans -- non government-guaranteed loans.

I am wondering if they will be around in, say, 5 years.

These are unsecured loans and I believe the lenders lack the extraordinary powers of the government-guaranteed loan collectors. They make loans of 10 or 15 years, at competitive interest rates.

Will these survive the next recession? If they are so wonderful, why weren't they around before 1995? Are they just a creature of the massive asset inflation and finance bubble?

[Sapiens]

Re: those private student loans -- fishy?

I was offered the opportunity to “invest” on some of these, the selling point being that these types of loans cannot be discharged through bankruptcy.

http://www.nytimes.com/2007/04/05/ed...n/05loans.html

[Harry Pottery]

Re: those private student loans -- fishy?

One may not be able to discharge these loans through bankruptcy, but one cannot very well pay them back either, if one does not secure an adequate income to do so.