July 19, 2012
Boom in Private Student Loans Mirrored Mortgage-Lending Frenzy, Report Says
The same kind of lending frenzy that created the subprime-mortgage crisis also fueled a dangerous boom in private student loans, says a report released on Friday by the Consumer Financial Protection Bureau and the U.S. Department of Education.
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In its analysis for the report, the bureau found that about 40 percent of borrowers with private student loans had not exhausted their federal loan options. "Simply put, that's a mistake," Mr. Duncan said during the briefing. "Federal student loans are the best deal around."
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