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

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Thread: Are student loan interest rates to high?

  1. #131
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by MildSteel View Post
    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.
    Are you kidding me? Are you now arguing that a secured loan is "just like" a non-secured loan? The parent may well be able, should they so choose, to use that home equity as collateral and thus get a second mortgage (secured loan) to fund their child's college costs.
    “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

  2. #132
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by MildSteel View Post
    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.
    I graduated not long ago, and it took me nearly 10 years. I figure on average I put back about 700 a month for the duration. I lived conservatively and enrolled in as many night and weekend and online classes as I could. I believe my credits were in the neighborhood of 450 each, books were the killer, almost as much as the tuition.
    "It is only when men contemplate the greatness of God that they can come to realize their own inadequacy." Jean Calvin

  3. #133
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by ttwtt78640 View Post
    Are you kidding me? Are you now arguing that a secured loan is "just like" a non-secured loan? The parent may well be able, should they so choose, to use that home equity as collateral and thus get a second mortgage (secured loan) to fund their child's college costs.
    No I am not kidding you. And again, you are confusing the purpose of private commercial lending with trying to facilitate education. It's two different goals. Furthermore, the person may not have that much equity in their home to borrow the type of funds that it would take to send a kid to med school.

  4. #134
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by johndylan1 View Post
    I graduated not long ago, and it took me nearly 10 years. I figure on average I put back about 700 a month for the duration. I lived conservatively and enrolled in as many night and weekend and online classes as I could. I believe my credits were in the neighborhood of 450 each, books were the killer, almost as much as the tuition.
    Someone with the typical wages that a student would get, would be hard pressed to pay $5000 a semester for tuition out of pocket. It is as simple as that.

  5. #135
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by MildSteel View Post
    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.
    I went to private schools -undergrad and grad. They have both quadrupled. The undergrad went from about $6,000 to about $24,000; the grad school from $10,000 to $40,000. I couldn't go there now. Back then I managed to graduate with $16,200 in student loans (rest was mainly grants and scholarships; we kicked in about $1,000 per semester). I thought $16K was a lot in loans! these days, that's nothing....

  6. #136
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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.
    I'm not confusing anything. What you're doing is trying to ignore the fundamental facts.

    "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, ..."

    That, no matter who originates the loan, represents a high risk, and interest rates represent what is necessary for such a high risk loan to be made.

  7. #137
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by MildSteel View Post
    No I am not kidding you. And again, you are confusing the purpose of private commercial lending with trying to facilitate education. It's two different goals. Furthermore, the person may not have that much equity in their home to borrow the type of funds that it would take to send a kid to med school.
    What the hell is "private commercial lending"? A mortgage isn't a "private commercial loan". A commercial loan is a commercial loan. A mortgage is a consumer purpose, real estate secured loan.
    Horse sense is the thing a horse has which keeps it from betting on people. ~W.C. Fields

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    Re: Are student loan interest rates to high?

    Quote Originally Posted by paddymcdougall View Post
    I went to private schools -undergrad and grad. They have both quadrupled. The undergrad went from about $6,000 to about $24,000; the grad school from $10,000 to $40,000. I couldn't go there now. Back then I managed to graduate with $16,200 in student loans (rest was mainly grants and scholarships; we kicked in about $1,000 per semester). I thought $16K was a lot in loans! these days, that's nothing....
    Wow! That's a lot! Yeah, the rate that higher education prices have soared recently is ridiculous.

  9. #139
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by ocean515 View Post
    I'm not confusing anything. What you're doing is trying to ignore the fundamental facts.
    The fundamental fact here is that you want base borrowing for higher education on commercial, for profit lending by the private sector. That is the fact.

    Quote Originally Posted by ocean515 View Post
    "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 purpose of making the loan to the student is to facilitate the student's ability to obtain a higher education, not to gouge the student to make a profit. It is as simple as that.

    Quote Originally Posted by ocean515 View Post
    That, no matter who originates the loan, represents a high risk, and interest rates represent what is necessary for such a high risk loan to be made.
    And the interests rates that you mention are based on commercial lending models whose motives are for profit. We are not talking about that. The government's motive should be to facilitate the student's education, not gouge for profit.

  10. #140
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by MildSteel View Post
    The fundamental fact here is that you want base borrowing for higher education on commercial, for profit lending by the private sector. That is the fact.



    The purpose of making the loan to the student is to facilitate the student's ability to obtain a higher education, not to gouge the student to make a profit. It is as simple as that.



    And the interests rates that you mention are based on commercial lending models whose motives are for profit. We are not talking about that. The government's motive should be to facilitate the student's education, not gouge for profit.
    You seem to gloss over (purposefully ignore?) the obvious - the student that gets a degree, in a field that gets them a decent paying job, is not the one that is likely to default regardless of the interest rate. The basic problem is that "facilitating access" to college alone does nothing but guarantee (government) tuition payment to the educational institution, it is still up to the borrower to repay the (government) loan even if they do not graduate with a valuable degree.

    Since the (on time) graduaiton rates for college are about 60% then it follows that about 40% will be faced with repaying their student loans yet will still lack a college degree thus being much more likely to default. To blow that off as not important means that instead of recycling a pool of student loan money, more must be added each year simply to cover the losses from those who defaulted. IMHO, that default cost should be shared, if not totally born, by those that actually use these loans - not only "the rich" as we now seem to call federal income taxpayers.
    “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

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