Student loans are a major source of financing for college, but they also come with one of the highest interest rates compared to other types of loans. This is because student loans are unsecured, meaning they don't have any collateral to back them up. Additionally, lenders view student loans as a higher risk loan than a traditional loan because students typically don't have any established credit or a steady income. Furthermore, the government subsidizes student loans, which keeps interest rates higher. Overall, student loans have high interest rates due to their unsecured nature, lack of credit history, and government subsidies.
Mar, 7 2023