Recent Federal Student Loans Look A Lot Like Subprime Mortgages

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“Federal student loans made in recent years resemble the toxic subprime mortgage loans that helped cause the Great Recession, new data show,” according to The Huffington Post.

“Rather than paying down their balances after leaving school, borrowers with recent federal student loans are experiencing an increase in debt as they fail to make enough payments to offset the accumulating interest on their loans.

The situation parallels subprime mortgages before the financial crisis, when lenders gave borrowers loans they couldn’t afford by allowing them to make payments that didn’t actually reduce their balances.