Then why are people taking them? I thought the point of taking out private loans was for the borrower (and cosigner) to accept additional risk to get more borrowing power, and if the student couldn’t pay then it would become the responsibility of the cosigner. Aren’t people counseled to not borrow more than they can realistically repay?
I think a lot of people overextend to get money for schools they want, which often seem to be schools they can’t really afford. I’m not sure there’s much that can be done for them long-term. Can banks afford to carry the costs of defaulted loans for millions and millions of borrowers?