Rising federal student loan debt and potential changes to how such loans are treated under bankruptcy could be a “train wreck” for U.S. taxpayers, Discover Financial Services President Roger Hochschild said.
The executive defended his company’s foray into the student lending market, stressing it adheres to high underwriting standards when approving loan applicants.
However, he accused the federal government, which now controls the majority of student lending, of lax underwriting.
“I actually think it’s going to hit all of us as taxpayers in terms of what it does for the federal student loan program and their utter and total lack of underwriting,” Hochschild said. “But I do not think it will be a train wreck for Discover shareholders.”
Story by Andrew Johnson and Al Yoon for the Wall Street Journal.
Meanwhile, companies that issue credit cards can no longer market them to students at New Jersey public colleges under a law Gov. Christie signed Thursday.
The new law prohibits public colleges from entering into agreements that would allow students to be targeted in “direct merchandising of credit cards,” which includes displays.
Rutgers and Rowan Universities are among the schools that fall under the law.
The bill passed the state Assembly and Senate at the end of last year with overwhelming bipartisan support. Story by Jonathan Lai for the Philadelphia Inquirer.
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