View Poll Results: Are student loan interest rates to high?

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Thread: Are student loan interest rates to high?

  1. #121
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by ttwtt78640 View Post
    Using that argument, the interest rates can be zero or even negative for any and all loans and we are still left with the problem of what, if anything, is a better investment than some other thing (budgeting). While an engineering degree from a major college may be a good risk (investment?) that is not to say that a cosmetology degree form some fly by night online diploma mill is an equally good risk (investment?).

    Even if you are firmly in the public debt does not really matter camp, it still makes sense to borrow and spend (invest?) wisely rather than to pretend that all government spending is equally beneficial. If everyone in the US was suddenly able to go to college would we really be better off or simply have better educated burger flippers, grass mowers, bed makers and bean pickers? If anyone could be a doctor, lawyer or Indian chief would those jobs still command an upper middle class salary?
    Well that might be so, and although it is a concern, it is a rather involved topic that deserves separate discussion.

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    Re: Are student loan interest rates to high?

    Quote Originally Posted by ocean515 View Post
    Because of the risk involved. Remember: "A student, with little to no credit history, is provided loans into the $10's of thousands, based on no income, or at the very most, the hope of future income, ..."
    The problem with your response is that you appear to confuse the purpose of private commercial lending institutions and federal student loans. The purpose of the former is to make a profit, while the purpose of the latter is to facilitate education. As such, the level of risk is somewhat, though not entirely irrelevant to the interest rate.

  3. #123
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    Re: Are student loan interest rates to high?

    Personally, I think that the issue isn't so much interest rates, as it is how insanely high the total cost of education can be.

    I mean...anywhere from 50 thousand to several hundred thousand dollars, in some cases probably more, depending on how much education you get.
    At that level, and given the current job market and available income for someone starting out (in most cases), there's just no possible way anyone (especially students without parental help for some/all educational costs) is going to pay off their education costs in a short amount of time.
    Years, perhaps multiple decades, are required, in many cases, to pay off such loans...

    So, IMO we need to either cut education costs, reduce interest rates on loans, increase tuition grants...or preferably all of the above. Maybe something else I haven't thought of.


    Basically the problem at this point is that higher education costs prevent those of us who are less well-off from accessing it.
    How many people out there might be capable of something, yet cannot due to monetary reasons. Sure, some few get through on scholarships and the like, but the requirements and availability of that route limits it to only the very best.
    Education.

    Sometimes I think we're alone. Sometimes I think we're not. In either case, the thought is staggering. ~ R. Buckminster Fuller

  4. #124
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by MildSteel View Post
    The problem with your response is that you appear to confuse the purpose of private commercial lending institutions and federal student loans. The purpose of the former is to make a profit, while the purpose of the latter is to facilitate education. As such, the level of risk is somewhat, though not entirely irrelevant to the interest rate.
    That is absolute nonsense. The level of risk is important to ANY loan's interest rate - non-payment of government loans amounts to stealing public funds. Do you really intend them to be gifts?

    The affect of lowering the interest rate (which lowers the monthly payment and thus the real cost of the loan) simply enables the seller (in this case, colleges) to raise the price of the good/service financed (tuition, room and board) with no apparent cost change to the consumer. Perhaps that helps to explain why the cost of college far outpaces general inflation.

    That "easy credit" and "flexible repayment terms" is largely what caused the housing market crash - if J. Q. Public can buy X on credit (federally insured at that) then they care only what the initial monthly payment is and not what X actually costs. If that payment is not due for 4 to 6 years (longer than they have been an adult) than they may not really care at all.
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

  5. #125
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by ttwtt78640 View Post
    That is absolute nonsense. The level of risk is important to ANY loan's interest rate - non-payment of government loans amounts to stealing public funds. Do you really intend them to be gifts?
    I disagree with you in the strongest terms. No one is saying it should be a gift. One the other hand the government should not be gouging customers either. For example, a parent could borrow $100,000 to buy a house at 3 or 4 percent interest. However, if he wanted to borrow money for his kid to attend medical school he might have to pay 8.5 percent, regardless of his credit. It is ridiculous. It is especially ridiculous when the government is paying at the most 2.5 interest for a 30 year loan. The problem with your assertion is that it ignores the purpose of the loans. It's to facilitate education, not to make a profit.

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    Re: Are student loan interest rates to high?

    Perhaps student loan interest rate should be 0% for all student loans.
    However that would mean that you could effectively pay whatever the hell amount of money you wanted for education, without worry about your costs increasing over time.
    Tuition costs would go up, undoubtedly.
    In fact, any degree of decrease in the interest rate would have that effect, likely...

    What's ****ed up about that is, the measure of "how much it can cost" is apparently "how much is the maximum the market can stand".
    Only the market in this case is higher education students. Which IMO for damned sure doesn't promote education, which is (also IMO) ****ing stupid.

    I'm not entirely sure how that can be improved though, without some kind of grand governmental education, or somehow all the universities deciding to offer education for free or less money, for some inexplicable reason due to an unexpected mass change of heart/style.
    Education.

    Sometimes I think we're alone. Sometimes I think we're not. In either case, the thought is staggering. ~ R. Buckminster Fuller

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    Re: Are student loan interest rates to high?

    Quote Originally Posted by The Mark View Post
    Personally, I think that the issue isn't so much interest rates, as it is how insanely high the total cost of education can be.
    That is part of the problem as well. I remember my tuition for a full time load at one very large state university was around $500. Now that same tuition is about $5000. It is totally insane. However, that is a separate discussion of its own.

  8. #128
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by MildSteel View Post
    What a stupid notion. That's ALMOST like saying no one forces someone to drink the water that they drink.
    No it's not. I paid cash. No loan, no grant and I didn't die in three days.
    "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: Are student loan interest rates to high?

    Quote Originally Posted by johndylan1 View Post
    No it's not. I paid cash. No loan, no grant and I didn't die in three days.
    Like I said earlier my tuition was around $500, full time, at a major state university for one semester. That same tuition is around $5000 now. It is impractical.

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    Re: Are student loan interest rates to high?

    Quote Originally Posted by MildSteel View Post
    That is part of the problem as well. I remember my tuition for a full time load at one very large state university was around $500. Now that same tuition is about $5000. It is totally insane. However, that is a separate discussion of its own.
    In some ways it is a different discussion

    But in other ways it is absolutely the same discussion - if tuition costs weren't so insanely high, the current interest rates wouldn't be nearly as painful.

    After all, 5% interest on $100,000 is far more than 5% interest on $25,000.


    Edit: And repayment plans are often set up so the minimum payment is barely over the amount necessary to pay whatever the interest is for the planed payment period (a month, for example).
    Education.

    Sometimes I think we're alone. Sometimes I think we're not. In either case, the thought is staggering. ~ R. Buckminster Fuller

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