How Do Student Loan Lenders Get Away With Charging so Much Interest?

Question:

Dear Steve,

I am reading all the horror stories related to student loan interest and basically, we are all just screwed! Right? We are in the same boat and so is our daughter. It is so depressing and heart-wrenching, it will affect us the rest of our lives. It really shouldn’t be legal, how do they get away with it?

Judith

Answer:

Dear Judith,

  • They put the terms in the loan contract.
  • People fail to read the contract.
  • Borrowers sign the contract and agree to the terms.
  • The lender points back to the loan agreement to show the borrower agreed to the terms.

Basically, people screw themselves by entering into complex agreements crafted by smart attorneys and marketing people.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

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This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.