Zero Interest College Loans - Page 4

RightinNYC · 01-31-08, 09:39 AM

Quote:

Originally Posted by Goldenboy219

While i believe that it would be really nice for students who need to borrow to pay for school to have 0 interest, it shouldnt just be expected or given. Let me explain.

Say you are going to an open admission university, are a B student at best, have a mini spot on your criminal record, and were involved in 0 extra cirricular activity, why on earth would you believe your entitled or even the slightest deserving of interest free loans? Especially if there are other students who come from much simpler beginnings, and really sacrifice to go to school.

Because lets be serious here for a second. How many private student loans go to pay for "living expenses"?

I know so many people who take the max, even though they are C students and are going for a major where the job outlook is highly competitive. These are the people who are going to be paying off their loans for 20 years +.

There is to much of a possibility of moral hazard, and therefore an idea such as this should be used as an incentive/reward for students who are going to very expensive schools, have good grades, are involved in things more so then themselves, and are going into high paying fields. That way, the probability of the loan being out for the entire duration of the note is low. Is it a good idea? Yes, but not something that should be solely based on need, race, or disability. Merit should have more then a little something to do with it. Its something that is a little more complicated then "paying for college"...

Also, going to college is not by any means necessarily a good thing. Most of the literature on this topic is now suggesting that too many people may be going to college and neglecting industries that need good workers.

cf. Are Plumbers the new Lawyers?

American · 02-06-08, 10:14 PM

Quote:

Originally Posted by Tashah

Odyssey Scholarship Program

In 2007, an annonymous donor (Lester Crown) provided the University of Chicago with a $100M gift. Beginning in 2008, scholarships from this endowment will fund all or at least half of the tuition of low and moderate income students accepted by the university.

The University of Chicago: Odyssey Scholarships

Hundebolg will complain if they would pay student to attend college.

Monk-Eye · 02-11-08, 09:03 AM

"Demigods"

Quote:

Originally Posted by Ikari

what bank would possibly make that loan then? Sorry, but loans are part of what is counted as asset to banks and they can only have a certain percentage based on how much they have in vaults and how much they have coming in. So in the end you're going to ask a bank to make a choice between a no-interest student loan and some other interest bearing loan. Which one do you think they'd take? By setting the student loan interest rate to zero, you will have effectively and dramatically cut the amount of money available to students by making the loans undesirable to banks.

The money is fiat, the volume of currency available is set (dickering with interest rates) according to requirements which provide enough currency to support exchanges in the market, while also assuring the value of the currency remains relatively constant.

Banks make loans from the federal reserve, and, if the federal reserve loaned money earmarked as zero percent specifically for college loans, it would be insignificant to the banks bottom line.

The banks collect the management fees, college students go about their business with a straight loan rather than being engulfed in a +32% payback, and the public receives a needed emphasis on higher education.

Reiterating, the tax structure is set up to reward corporations, which, by a source of accelerated income, implies rapid repayment.

Why unincorporated and incorporated loan rates are on equal footing is unobjective.

Ikari · 02-12-08, 10:43 AM

A bank can not make infinite loans, that is well regulated by the government. It's not like they're all like "well let me just go to the federal reserve and get that money for you...here you go". Banks are regulated (or should be, if you deregulate them you get the mortgage mess we're in now) and can only make a certain amount of loans and the amount they are able to make is based in part off of the net amount of assets and liquidity a bank has. They have certain amounts of assets, certain amount of money on hand, etc. In short, the whole of a banks assets are finite and the amount they are able to make out in loans is based off of that. So a bank can only give out a certain amount of money, it's not infinite. Now you are saying that student loans should be zero percent. So here's the bank, it can only make so many loans for so much money. Now they have to choose, maybe a high risk loan with lots of interest (as something high risk would contain high interest) or a student loan which will get paid back, but no interest. What are you going to take? You can't make money off the student loan, so if you had to choose even here you would take the higher risk one.

Student loans are already low interest bearing, if you reduce that to zero you are going to remove the incentive to make that loan. If there is some amount of interest, maybe a bank would take a student loan over a high risk loan because at least with the student loan they would be guaranteed to make that money. There is no such thing as a free lunch. Investing in your education is very important and financially sound as with a college degree you'll make markedly more money than without. It is an investment in yourself that you are making when you take out student loans, it's not the government's responsibility. Aggregated over the whole, it benefits society greatly, but that doesn't remove it from being a personal choice and a personal investment.

chosendudenyc · 03-06-08, 12:38 AM

Quote:

Originally Posted by Hundebolg

I think free higher education would already boost admission chances for the often financially disfavoured minorities.

Can you please define what a "disfavoured minority" is?

In America, there are numerous under-serve children, young adults, and adults from various walks of American demographics. For you to put unneeded emphasis on skin tone rather than on the demand for a challenging and equal educational system in America across the board, tells me how you perceive this important issue in America and how you see many Americans as well.

I may live in NYC, but my views toward interest free loans do not connect toward another member of this forum, who commented above. His view point is from a conservative limitation rather than what is best for this country and those who wish for an equal education, that is funded impartially and just.

I do not see the burden directly on our government. Before anyone decides better support is NOT needed in order for many in America, to attend a higher education, theories and then discussions would have to be entertained. Pros and Cons would have to be intelligently and fairly converse.

Whomever has the right to continue and pay for college; those who cannot must have more options that will not be so costly, while in college and out. Once again, the debate should not be the governments interaction on cost; that has not been discussed, the debate should be on entertaining zero interest loans based on qualifications and not quotas.

Another point on quotas, they would not exist if individuals and businesses and schools would simply not abide by biasness, racism, and any other form of inferior thinking toward others in this country. Until, that form of thinking is abolish, quotas must continue. You cannot complain about racial quotas, yet sit on your behind as many Americans today continue to be discriminated upon. That isn't fair and very much anti-American.

"One could hope it would eliminate race quotas and revert back to a merit based entrance criteria." My feelings are displayed above.