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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: kathtoo who wrote (81490)	5/5/2007 7:56:49 PM
From: Oblomov	Read Replies (1) \| Respond to of 110194

Before the federal cap on interest rates was struck down, it was nearly impossible for people with a poor credit history to get a loan of any kind. They would go to a loan shark, and pay astronomical rates of interest (100% per week or more). Or they would go to a pawn shop, and pay similar rates of interest, using family heirlooms as collateral. A payday loan, expensive though it may be, is a far better deal, and the lender won't kill or maim the borrower if a payment is missed. The government subsidy for student loans is one of several contributors to rapidly rising tuition rates (and for some reason, although tuition has risen faster than inflation for many years, no one accuses universities of "price gouging" as they do for gasoline or other goods).