Why do student loans have such high interest rates?
- Jul, 12 2023
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In my latest blog post, I dove into the complex world of student loans to understand why their interest rates are so high. It turns out, it's primarily due to the inherent risk lenders take on since students often don’t have a credit history or consistent income. Additionally, these loans are unsecured, meaning there's no collateral, making them riskier for lenders. The long repayment terms also contribute to the high rates. Lastly, federal loan rates are set by Congress and can be influenced by the economy and political climate.