August 12, 2009
Students Are More Likely to Default on Direct-to-Consumer Loans, Moody's Says
Securities backed by student loans that are marketed directly to consumers carry more investment risk than those backed by loans marketed through student-aid offices, according to a new report by Moody's Investors Service.
In the report, Moody's analyzed the performance of a sample of private loans that have been securitized since 2004 and determined that students who borrowed directly from lenders were more likely to default than those who borrowed through their
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