Student Loan Business: An Ethical Dilemma in the Credit Crunch

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?[poll id=50]Is this right, wrong, or simply inevitable? Leave your thoughts in the comments section.