Business: Student-Loan Mess

Enrique Ponce, a construction laborer from El Puente, Calif., and Michael Ward, a resident physician at the University of California Hospital in Los Angeles, exemplify two reasons that a federal program to guarantee loans to needy students is in deep trouble. Ponce borrowed $1,500 from a trade school that offered to teach him to become a TV repairman, but dropped out after two weeks because he found the courses too difficult. The school by then had already sold the loan to a credit union, which is now trying to collect the $1,500 from the...

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