States are now offering their own student loan programs because the federal government capped how much debt teenagers can take on. Connecticut, Minnesota, and Rhode Island have decided to step in. They've looked at the federal borrowing limits and said "hold my beer."
This is your state government helping you. The same people who manage the DMV are now in the lending business. They've watched the federal loan system create a trillion-dollar disaster and thought "we should get in on that."
The programs come with trade-offs. That's what they're calling it. Trade-offs. Like when you trade your financial future for a degree in communications. That kind of trade-off.
Here's what happened: Washington said kids can't borrow as much anymore. Some bureaucrat ran the numbers and realized maybe we shouldn't let eighteen-year-olds take out six figures to study philosophy. Revolutionary thinking. So now Connecticut swoops in to fill the gap. Can't get enough federal debt? Try our state debt. It's locally sourced.
The interest rates are competitive. The terms are flexible. The result is the same: you're f*cked, but now with more regional flair.
Minnesota and Rhode Island are doing this too. Three states looked at federal student loan reforms and said "no, we need to make sure kids can still bury themselves." It's heartwarming. Really shows the power of state innovation.
This is what happens when you try to fix one problem and create seventeen new ones. The federal government caps borrowing. States expand lending. Students still graduate with debt they can't repay, except now it's owed to Hartford instead of Washington.
At least when you default on a federal loan, you're disappointing the entire country equally.
Photo by Andrew Dawes on Unsplash
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