I call her 50% responsible. The other half is the lender (gov't-backed entity) squeezing her at relatively high interest. They shouldn't have got so greedy. Now they'll get no more out of her, and of course taxpayers eat the loss.
Interest rates were high back then. 8% is right on par with average student loan and mortgage loan interest rates of the late 90's. So she was not really getting squeezed. She was agreeing to what most people taking a loan were agreeing to at that time.
