The student loan business is going through a credit crisis, and some of the nation’s largest lenders are responding with a new business model that may be sound business but is ethically questionable.
Students at the top-tier schools are being taken care of, but those at the lower-rung — community colleges, and other less-competitive institutions — are being dissed in the lending game, whether by being dropped by lenders or being forced to take packages that are far-less appealing than their ivory tower peers.
The thinking is simple: the better the school, the more money that student is likely to make in the long-term, which means you’ll get a more solid return on the loan. But what about the ethics here? Are these large lenders discriminating against a large economic chunk of the population? I think so, because the nation’s neediest students are the ones most likely to be hurt. Community college may not be a stepping stone for the corner office, but it is an invaluable stepping stone to a better job and a better life for the less fortunate.
The tag line for this blog is “right and wrong in a for-profit world.” This is exactly that kind of dilemma. What’s right for profit may not be ethically sound. So, are these large lenders in the wrong here?
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