Why Student Loans Are Seen as Risky Investments by Banks

It's not them, it's you 💰

July 2, 2023
7 min

The Good Stuff

Why do many banks consider student loans risky investments?

Many banks consider student loans risky investments because they involve lending money to individuals with limited credit history and uncertain future income. Unlike other types of loans, student loans often have long repayment terms, and there is a higher chance of default due to factors like unemployment or financial hardship. These risks make banks cautious about potential losses and impact their overall financial stability.

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