For instance, private creditors will give out student loans at obscenely high compounded interest so the poor student will be stuck with debts for many years.
Similarly, when the working poor and lower-middle class need a paycheck advance, some shops and creditors will offer loans with immense interest rates, too.
But according to the Free Market, competition amongst creditors should mean that the creditor offering the lowest interest rate GETS most of the customers.
Why doesn’t it work that way?
If I were a creditor and I offered students a 1%-interest student loan (but everyone else was offering students 5%-interest loans), technically I should be flooded with students trying to get money from me!
@ SDD: But WHY?
Don’t free-market principles state that if the supply were to increase (i.e., lower-interest loans), there’ll be a corresponding demand to match it?