Why are young Adults allowed to pull 100k in students loans but not business loans?

Why are young Adults allowed to pull 100k in students loans but not business loans?

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  1. Student loans are structured differently. They are to make you better and your education is “good debt” whereas a business loan fan be used for anything, has higher default risk, higher interest rates (typically) and lenders scrutinize who gets business loans : edit the use of grant and government subsidies also help student loans be more available

  2. Because it’s much lower risk. Students have a life time of work ahead of them, the loans are likely to pay back. For small businesses, many of them fail within the first 3 years, and in that case the loan money is gone, unless you provide some personal collateral in which case it’d probably be easier to find a lender.

  3. College nearly guaranties a higher paying job no matter the field over a life time. That will make the loan easier to pay back. If you start a business and fail that money is now just gone. Business loans are typically harder to get than personal loans.

  4. To make it look like the overpriced “education” is actually worth while. The system doesn’t teach you how to function well in life because then the playing field would be equal and everyone would have to work hard.

    If you had a choice between debt that will follow you for a degree you may never be able to use or debt that can go against the business and be “written off” if the business fails I know what many would choose.

    The amount of people I know that genuinely think everyone can save up, invest and retire early is astounding. If everyone is living off investments, who is working for the companies actually doing the work?

  5. A lot of them could work for this purpose. I just skimmed their playlist and “Who owns Antarctica” is pretty good from my memory. For instance at one point in the video they talk about how two countries consider themselves to both be owners of one chunk of the antarctic but neither one really enforced this so the border is a bit arbitrary. There was another video where there a whole plot of land that neither country wants to claim ownership of. I forget the reason it might because of tax reasons?

  6. If it’s a non-federal loan (US), they will need a co-signer and actually have some roadblocks trying to get much.

    If it’s a federal loan, it’s pretty easy.

    Now that the clarification is there after your question made it sound like it was just an easy thing to do all around, it’s because it’s safer. You’re more likely to graduate college than you are to run a successful business.

  7. To be clear…..
    Unless you dip into private student loans….which is a bank assessed risk evaluation….
    Federally backed student loans have limits.

    Aggregate loan limits
    $57,500 for undergraduates-No more than $23,000 of this amount may be in subsidized loans.

    $138,500 for graduate or professional students-No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.

    These sums are incrementally allotted and restricted based on progression

    Undergrads
    First-Year Undergraduate Annual Loan Limit
    $5,500 dependent students/$9500 independent students

    Second-Year Undergraduate Annual Loan Limit
    $9,500/$10500

    Third Year and Beyond Undergraduate Annual Loan Limit
    $7500/$12500

    Graduate students annual loan limit
    $20,500

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