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I decided to spend some time and check this out.
A student cannot get a federal student loan without completing pre-loan counseling where every nuiance of the loan and repayment and the consequences of non-payment are explained.
I checked random state universities' websites and they appear to all have links to Private Loan Comparison Charts that set out the range of interest rates (yes, up to prime +6%). These sites also warn the student not to take out these loans unless and until they exhaust all federal loan possibilties.
I then looked at the website information at my S's private college. The site warns that all federal loans should be exhausted before recourse to Private loans. The site gives excrutiating details of the options and obligations concerning the different loan programs.
Folks-- you would have to be intentionally trying NOT to understand that loans are loans and have to be paid back.
As several posters either out-right state or imply, the desire or dream of attending college, not the lack of disclosure or candor by the school is what can result in taking out loans that you cannot pay back.
It is stunning that some suggest that the use of "aid" on a statment means that they have been tricked into taking out these loans thinking that they don't have to pay the money back. It maybe a dream, but only as in "dream on."
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