When looking at the future of student loans in the state of Connecticut you can compare them to the future of the mortgage industry. These two different types of loans have the same basic qualities. What many people do not realize is that if the market of student loans experiences the same ups and downs that the market of mortgage loans went through the future of student loans in Connecticut may seem unclear and unstable.
Similarities Of Mortgage Loans And Student Loans
There are many similarities to having a student loan in the state of Connecticut as there are having a mortgage loan in the same state. One of the main problems that are being seen throughout the state is that people are not educated well enough in the financial aspect of life. This leads to people applying for loans for people with bad credit as well as defaulting on the loans and credit cards they currently have.
Another similarity can be found when looking at the interest rates. Mortgage companies as well as student loan companies will offer really low rates to get the customers in the door. These are often referred to as teaser rates. Most of the time the borrower will find that the minimum monthly payment is sometimes not even enough to cover the interest that is accruing every month. This causes the amount of the debt to increase every month. What makes it worse is when that introductory rate grace period is over the payments will increase even more. This will often lead to defaults on loans as well as bankruptcy.
Who Is To Blame
Who is to blame is a question that is not easily answered. Many people will blame the lenders for letting the borrowers get trapped into a loan that they cannot ultimately afford. This goes for student loans and mortgage loans as well as any other type of loan that uses a low interest rate to trap borrowers into borrowing money. However many will also blame the borrowers. It is in writing that the interest rate is going to change and it should also state what the interest rate would change to. The borrower needs to look at their future financial position as well as the financial position they are currently in.
Many of the colleges and universities throughout the state of Connecticut are doing their part in educating their current students and future students. They are trying to supply the students with as many details as they can to keep the student from getting into financial trouble through their student loans. It is important that all students check with their financial aid office before applying for student loans. The office supplies a consult to help students to make the right decisions regarding student loans.
There is not an easy solution to the problem of the failing student loan programs through out the state of Connecticut. All students should prepare themselves financially and educate themselves regarding the loan market and what their options are.