View Poll Results: Should Student Loan Interest Rates Be Lowered Below 4%?

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Thread: Should Student Loan Interest Rates Be Lowered Below 4%?

  1. #11
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    Re: Should Student Loan Interest Rates Be Lowered Below 4%?

    Quote Originally Posted by TheDemSocialist View Post
    Most student loan interest rates are at 7% or above. There has been some legislation introduced in congress that calls for student interest rates be lowered to below 4%. Do you support these rates?
    I think student loan rates should be lowered to 2% over the discount rate. Why they're 7% is beyond me. Delinquent paying your student loan? Not a penny income tax refund until you're caught up.

  2. #12
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    Re: Should Student Loan Interest Rates Be Lowered Below 4%?

    Are we talking about private lenders or the government?

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    Re: Should Student Loan Interest Rates Be Lowered Below 4%?

    Quote Originally Posted by Cephus View Post
    They're not risky at all, they cannot be discharged in bankruptcy or gotten away from in any other way. They will be repaid eventually unless the individual drops dead right after graduation.
    How many student loan borrowers struggle with repayment?


    Of the 37 million borrowers who have outstanding student loan balances, 14%, or about 5.4 million borrowers, have at least one past due student loan account.


    Of the $870B-$1T in outstanding student loan debt, approximately $85 billion is past due.
    (Source: FRBNY)


    The official FY 2010 two-year national student loan cohort default rate rose to 9.1 percent, up from 8.8 percent in FY 2009, while the three-year rate declined slightly from 13.8 percent to 13.4 percent. (Source: U.S. Department of Education)

    Only about 37 percent of federal student loan borrowers between 2004 and 2009 managed to make timely payments without postponing payments or becoming delinquent.


    For every student loan borrower who defaults, at least two more borrowers become delinquent without default.


    Two out of five student loan borrowers or 41%- are delinquent at some point in the first five years after entering repayment.


    (Source: Institute for Higher Education Policy)


    As of 2012, there are now more than $8 billion in defaulted private loans, or 850,000 distinct loans in default. (Source: CFPB)
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    Re: Should Student Loan Interest Rates Be Lowered Below 4%?

    Quote Originally Posted by johndylan1 View Post
    Student loans are fairly high risk loans. I would not mandate rates be lowered.
    How are student loans high risk, when they are one of the only types of loan that even bankruptcy can't get you out of repaying?
    If you build a man a fire, he'll be warm for a day.

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    Re: Should Student Loan Interest Rates Be Lowered Below 4%?

    Quote Originally Posted by johndylan1 View Post
    • Of the 37 million borrowers who have outstanding student loan balances, 14%, or about 5.4 million borrowers, have at least one past due student loan account.
    That's not risky for the government, they make money on the past-due fees. That is, in fact, how the entire credit card market works.

    • Of the $870B-$1T in outstanding student loan debt, approximately $85 billion is past due.
    (Source: FRBNY)
    Past due is not the same as never paid. There is no way to get out from under student loan debt.

    • Only about 37 percent of federal student loan borrowers between 2004 and 2009 managed to make timely payments without postponing payments or becoming delinquent.
    Which, again, isn't the same as being a risky proposition for the government, they make even more money when the delinquent fees are paid.

    • As of 2012, there are now more than $8 billion in defaulted private loans, or 850,000 distinct loans in default. (Source: CFPB)
    Which, again, isn't in default, they are just late. The only way out of these debts is to die.

    So where is the risk to the government, or to the private organizations who are guaranteed their money under the same rules again?
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    Re: Should Student Loan Interest Rates Be Lowered Below 4%?

    We shouldn't be paying interest on student loans because we shouldn't have to be taking out student loans. The Higher Education System in this country is a joke, a sick, perverted joke.

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    Re: Should Student Loan Interest Rates Be Lowered Below 4%?

    Quote Originally Posted by Cephus View Post
    That's not risky for the government, they make money on the past-due fees. That is, in fact, how the entire credit card market works.



    Past due is not the same as never paid. There is no way to get out from under student loan debt.



    Which, again, isn't the same as being a risky proposition for the government, they make even more money when the delinquent fees are paid.



    Which, again, isn't in default, they are just late. The only way out of these debts is to die.

    So where is the risk to the government, or to the private organizations who are guaranteed their money under the same rules again?
    Funny, The stat says "default" and your reply "again isn't in default". Wow, how can you write that? Secondly, I was showing the nature of the risk. Risk isn't only measured in default, it is also measured in loss of revenue from late pay, loss due to forgiveness programs, as well as loss in opportunity costs. These loans are, as I initially stated, relatively high risk. Many never fully repay the loan. Nearly half are delinquent at some time in the life of the loan, that's risky.
    "It is only when men contemplate the greatness of God that they can come to realize their own inadequacy." Jean Calvin

  8. #18
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    Re: Should Student Loan Interest Rates Be Lowered Below 4%?

    Quote Originally Posted by johndylan1 View Post
    Funny, The stat says "default" and your reply "again isn't in default". Wow, how can you write that? Secondly, I was showing the nature of the risk. Risk isn't only measured in default, it is also measured in loss of revenue from late pay, loss due to forgiveness programs, as well as loss in opportunity costs. These loans are, as I initially stated, relatively high risk. Many never fully repay the loan. Nearly half are delinquent at some time in the life of the loan, that's risky.
    Many people think "default" means you stop paying and never start again. It's like declaring bankruptcy, where you settle your debts and are no longer required to pay on them. That's not the case with government college loans. You can never get out from under them, they can never be erased, even if you stop paying for a while, they just get worse and worse and there is no legal relief. It's not like a credit card where you can declare bankruptcy and the credit card company writes the debt off. These debts can never be written off. That's the point.
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    Re: Should Student Loan Interest Rates Be Lowered Below 4%?

    Quote Originally Posted by Cephus View Post
    Many people think "default" means you stop paying and never start again. It's like declaring bankruptcy, where you settle your debts and are no longer required to pay on them. That's not the case with government college loans. You can never get out from under them, they can never be erased, even if you stop paying for a while, they just get worse and worse and there is no legal relief. It's not like a credit card where you can declare bankruptcy and the credit card company writes the debt off. These debts can never be written off. That's the point.
    None of that matters. Either they are paid back on time or they are not. Those in the not category represent risk. Now, to the issue at hand. Easy money means easy signatures. That heightens not lowers risk. Easy money means higher tuition increases. Easy money means a willingness to take on more debt. All bad for students.
    "It is only when men contemplate the greatness of God that they can come to realize their own inadequacy." Jean Calvin

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    Re: Should Student Loan Interest Rates Be Lowered Below 4%?

    Quote Originally Posted by joG View Post
    Why should student loans have lower than market rates? Could you explain that?
    Because the government should not punish individuals who want to get an education. Hell why should student loans be above level the Federal Reserve offers to big banks? Warrent introduced a bill that would set them at the same level last year.


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