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. #21
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    Re: Should Student Loan Interest Rates Be Lowered Below 4%?

    Quote Originally Posted by TheDemSocialist View Post
    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.
    Who takes the defaults?

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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?
    Why does our government give rich bankers sub market rate loans but not our students? Can you explain that?

    Quote Originally Posted by joG View Post
    Who takes the defaults?
    As we've seen with the bankers, the American taxpayer takes the defaults.
    Quote Originally Posted by LowDown View Post
    I've got to say that it is shadenfreudalicious to see the rich and famous fucquewads on the coast suffering from the fires.

  3. #23
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    Re: Should Student Loan Interest Rates Be Lowered Below 4%?

    Quote Originally Posted by RabidAlpaca View Post
    Why does our government give rich bankers sub market rate loans but not our students? Can you explain that?


    As we've seen with the bankers, the American taxpayer takes the defaults.
    Except the bankers have an out through bankruptcy and live to swindle another day....

  4. #24
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    Re: Should Student Loan Interest Rates Be Lowered Below 4%?

    Quote Originally Posted by RabidAlpaca View Post
    Why does our government give rich bankers sub market rate loans but not our students? Can you explain that?

    As we've seen with the bankers, the American taxpayer takes the defaults.
    Yes. There is good reason.

    -The situation with the banks was very dangerous for the population at large and needed a very quick and decisive solution. The government did a number of things to stop the meltdown and each of these measures would need to be looked at individually. When you say "give rich bankers sub market loans" it would be necessary to be more precise, what you mean.

    First of all, the owners of banks like Citi lost practically their complete stake and the government got most of its investment back if it did not actually make a gain. The low interest rates being given now, are really too low. The main beneficiary is the US government, because it pays too little on its multi-trillion Dollar debt. The banks participate in this, because the theory is that increasing rates would slow economic growth, which it very probably would. This would mean fewer jobs, so the logic goes. And it is probably true that we would have more unemployed than we have, had the rates gone up a year or two ago.

    -Studying is an essentially private with positive external effects. The external effects a very important and require a mechanism by which they can be attained. Scholarships for excellent students are good. If a student wants to study, but is not good at learning can do that with his own money loaned or other. This puts a break on inefficient investment in professions that will find no employment.
    If the optimum level of external effect is not reached, then the government can make that transparent and an amount of money available to study the subjects from which the effects derive. If the student does not finish successfully, he should pay back the grant.

    PS: But who do you mean by "rich bankers"?

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

    Quote Originally Posted by joG View Post
    Yes. There is good reason.

    -The situation with the banks was very dangerous for the population at large and needed a very quick and decisive solution. The government did a number of things to stop the meltdown and each of these measures would need to be looked at individually. When you say "give rich bankers sub market loans" it would be necessary to be more precise, what you mean.

    First of all, the owners of banks like Citi lost practically their complete stake and the government got most of its investment back if it did not actually make a gain. The low interest rates being given now, are really too low. The main beneficiary is the US government, because it pays too little on its multi-trillion Dollar debt. The banks participate in this, because the theory is that increasing rates would slow economic growth, which it very probably would. This would mean fewer jobs, so the logic goes. And it is probably true that we would have more unemployed than we have, had the rates gone up a year or two ago.

    -Studying is an essentially private with positive external effects. The external effects a very important and require a mechanism by which they can be attained. Scholarships for excellent students are good. If a student wants to study, but is not good at learning can do that with his own money loaned or other. This puts a break on inefficient investment in professions that will find no employment.
    If the optimum level of external effect is not reached, then the government can make that transparent and an amount of money available to study the subjects from which the effects derive. If the student does not finish successfully, he should pay back the grant.

    PS: But who do you mean by "rich bankers"?
    You seem to think that the free loans for banks started and stopped a few years ago with TARP, yet it has occurred for the past 100 years and it occurs every single day. The federal reserve is not just a lender of last resort, it's become a lender for everything. "Approved" institutions can borrow from the fed at near zero interest, at which point they can loan out that free money to people like you and me for a massive markup.

    The government should not be in the loan business, but as long as we are, how is lining the pockets of rich bankers with a few extra percent of profits? Having an educated society is far, far more important than having richer people looking after our money.

    Rich bankers in this context I have defined as pretty much all bankers. Do you not see an issue with taxing Bob to loan to bankers for free so that they can loan the same money back to Bob for his mortage at 6%?
    Quote Originally Posted by LowDown View Post
    I've got to say that it is shadenfreudalicious to see the rich and famous fucquewads on the coast suffering from the fires.

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

    I don't think the government should have ANYTHING AT ALL to do with student loans.

    Either they qualify for them in the open market or they get help from private endowments/educational 'charities' or they are out of luck.

    And no, I don't really care if that means some broke nobody cannot take Elizabethan Poetry in college at the taxpayer's ultimate expense.
    If he wants to go to college, either earn it or get a private sector 'grant'.
    Last edited by DA60; 05-13-14 at 05:00 AM.

  7. #27
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    Re: Should Student Loan Interest Rates Be Lowered Below 4%?

    Quote Originally Posted by DA60 View Post
    I don't think the government should have ANYTHING AT ALL to do with student loans.

    Either they qualify for them in the open market or they get help from private endowments/educational 'charities' or they are out of luck.

    No doubt many will freak out at that idea...good.
    I like my state-owned bank, but the feds are nicer with the loans. A private bank? No thanks.
    Michael J Petrilli-"Is School Choice Enough?"-A response to the recent timidity of American conservatives toward education reform. https://nationalaffairs.com/publicat...-choice-enough

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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?
    Personally, I believe education is very important so I would encourage any country's government to make access to higher education as accessible and affordable as possible. That said, I'd support minimal or no interest rate charges on loans directly related to tuition fees and class materials but market rates charged for loans for other related expenditures. A lot of students have loans that they use to fund their lifestyle while in school as well as spring break vacations and trips to Europe, etc. which are allowed under the US's current student loan system. Why should a student get a preferential interest rate on such expenditures? If they want to rack up lifestyle debt before they have full time employment, let them pay credit card interest rates like everyone else.
    "Liberals claim to want to give a hearing to other views, but then are shocked and offended to discover that there are other views." William F. Buckley Jr.

  9. #29
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    Re: Should Student Loan Interest Rates Be Lowered Below 4%?

    Quote Originally Posted by RabidAlpaca View Post
    You seem to think that the free loans for banks started and stopped a few years ago with TARP, yet it has occurred for the past 100 years and it occurs every single day. The federal reserve is not just a lender of last resort, it's become a lender for everything. "Approved" institutions can borrow from the fed at near zero interest, at which point they can loan out that free money to people like you and me for a massive markup.

    The government should not be in the loan business, but as long as we are, how is lining the pockets of rich bankers with a few extra percent of profits? Having an educated society is far, far more important than having richer people looking after our money.

    Rich bankers in this context I have defined as pretty much all bankers. Do you not see an issue with taxing Bob to loan to bankers for free so that they can loan the same money back to Bob for his mortage at 6%?
    Actually, central bank lending is a tool to maintain orderly markets. As all tools can, this one too can be misused. The mechanism is rather straight forward, but there are details that are easily missed. In simple terms the lending rate is determined by the central bank according to the money requirements of the underlying economy, its transaction levels and the inflation target. This is a rather valuable public good that has been okay in itself. The rate is usually not zero and Bob is not involved here at all. And comparing it to Bob's mortgage rate seems to indicate that you have some other agenda than optimizing welfare in the economy.

    As to the "pretty much all bankers" it would be nice to be more precise, at least to the status of owner, manager or secretary.

  10. #30
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    Re: Should Student Loan Interest Rates Be Lowered Below 4%?

    Quote Originally Posted by joG View Post
    Actually, central bank lending is a tool to maintain orderly markets. As all tools can, this one too can be misused. The mechanism is rather straight forward, but there are details that are easily missed. In simple terms the lending rate is determined by the central bank according to the money requirements of the underlying economy, its transaction levels and the inflation target. This is a rather valuable public good that has been okay in itself. The rate is usually not zero and Bob is not involved here at all. And comparing it to Bob's mortgage rate seems to indicate that you have some other agenda than optimizing welfare in the economy.

    As to the "pretty much all bankers" it would be nice to be more precise, at least to the status of owner, manager or secretary.
    If the fed creates more money than the proportional growth of GDP, inflation will occur. They intentionally overshoot this to cause a several % inflation a year. That means Bob's account is devalued by several % a year, hurting his savings potential. This money has to go somewhere, and it goes into providing sub market loans for banks.

    Why should they not have to get funding the way the rest of us do? By paying someone to borrow it. Why would they ever pay me 5% interest when they can loan from the government at .5%?

    You for some reason seem to think lining the pockets of banks with hundreds of billions of dollars of essentially risk-free money provided by Bob's loss is ok, but doing the same for struggling students would be just nonsense.
    Quote Originally Posted by LowDown View Post
    I've got to say that it is shadenfreudalicious to see the rich and famous fucquewads on the coast suffering from the fires.

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