Private Student Loans' High Rates of Interests

What is the government going to do to be able to regulate the rise of rates of interest for private college loans?

The evidently high rates of interest for private student loan are so prevalent nowadays that they are being compared to that of the credit cards. College education nowadays has become more like a commercial commodity, where thousands of dollars is needed for any ambitious student to pursue it.

On the other hand, the interest rates of federal college loans are being regulated, and pegged up to a certain level prescribed by law. Presently, government loans have interest rates capped at 7 per cent at the most.

It’s a pity that private student loans have rates that reach up to as high as 22 per cent. The good news for the student-borrowers is that the Congress is addressing the issue of high rates on privates. It is determining if there is validity to the means by which the commercial banks and private lending institutions set such rates.

Another issue that concerned entities must address is the duration of repayment, the extension of which for private loans is allowed. Oftentimes, over-extension becomes inevitable for many student-borrowers and these cause them to be buried into serious debt situation.

Hopefully, regulations are strictly imposed and followed as a safeguard for the students themselves, most of whom become victims of private college loans’ high interest rates.