<p>Polo, to what version of an economic utopian society are you speaking? :)</p>
<p>Of COURSE, the loan rates should reflect the risk of the holder. Unfortunately, we who actually pay back our loans are subsidizing the ones that potentially won’t, thus the high rate of 7.9%, and up until recently the government gave PLUS loans to virtually anybody–it’s still pretty darn loosey-goosey to my way of thinking. And the rate probably won’t change with the attempted defaults on the horizon, and I use the word ‘attempted’ because of the non-forgiveness of PLUS loans in bankruptcy thing that went into effect. </p>
<p>And even THAT is only a band-aid. Bottom line is the old saying that you can’t get blood from a turnip. Will the government actually garnish wages, cut welfare checks & not let folks have an existence because they can’t pay off a PLUS loan? That doesn’t translate to votes. I think some type of bailout is coming at some point (we’re not there yet), but when it does it should include some benefits for those who actually plan to or have the means to pay the loans off.</p>