pupil Loan crisis Brewing In The United States

Student Loans Bank Of America - pupil Loan crisis Brewing In The United States

This mandated reduction in the interest rate charged by lenders, in theory, was to help American College Students to afford their education. The reverse ensue has happened, as by reducing the interest rate on learner loans, the government has mandated a reduction in the profitability on those loans, manufacture them less desirable as an speculation to the investors who purchase these loans from banks.

Student Loans Bank Of America

Investors in these loans furnish the liquidity to the banks to make future loans. Without this liquidity or capital, banks do not have the money to make new loans.

Recently nearly 70 learner Loan Lenders have suspended their lending, as liquidity has dried up from investors and lenders do not have the capital to make new loans. This list includes the nations largest bank...Bank of America, who three weeks ago stop lending money for learner loans.

Congress, the animal who created this question last fall, by trying to mandate interest rates on learner loans and who has no business setting prices in a Free store Economy, is currently attempting to fix the problem.

Three weeks ago the Us House of Representatives passed legislation to allow the department of schooling to purchase loans from lenders on the secondary market, to furnish liquidity to learner loan lenders, so they can make new loans. The agenda is called the "Lender of Last Resort Program".

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