Students Pay SLM 9.25% on Exploitative Loans for College

[abelenkpe]

Students Pay SLM 9.25% on Exploitative Loans for College

http://www.bloomberg.com/news/2012-06-05/students-pay-slm-9-25-on-exploitive-loans-for-college.html

Students Pay SLM 9.25% on Exploitative Loans for College
By Janet Lorin - Jun 4, 2012 9:01 PM PT

JPMorgan Chase & Co. (JPM) charges Mirella Tovar as much as 10.25 percent annual interest on her student loans -- a rate as high as a credit card.

The 24-year-old aspiring graphic designer, the first in her family to go to college, is among millions of former students paying off high-interest loans to private lenders, among them JPMorgan, SLM Corp. (SLM) and Discover Financial Services. In a good month, Tovar earns $730 as a part-time hostess in a pizza parlor, and most of that money goes toward her debt of $98,000.

Unlike the federal student-loan program, which lets consumers borrow at fixed rates directly from the government, these loans from at least 30 banks and other private lenders feature mostly variable rates that can be more than twice what some people pay in the U.S. program. With college costs spiraling, the marketing and interest rates of these loans are drawing increasing complaints from borrowers and regulators, who say teenage consumers often don’t understand their terms.

“It was like signing up for iTunes,” said Austin Bousley, 25, who applied on the Internet for a private loan from SLM, known as Sallie Mae, as a student at Suffolk University in Boston. Some of his loans, which he began taking out in 2006, carried rates as high as 9.25 percent. “The interest is accruing and accruing. I have a feeling I’ll be making payments forever.”

(more at link)

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[Turbineguy]

1. Students are

high risk debt slaves. But look at the bright side, at least the bankers will get their bonuses!