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

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Thread: Are student loan interest rates to high?

  1. #141
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by ttwtt78640 View Post
    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.
    What I would say is that you are overlooking the fact that the government has powerful tools at its disposal to recover funds from student loans in that they garnish wages and tax refunds. That is one thing. Again, as I said to you before, the government, through its empowered representative the Federal Reserve, has taken toxic loans from banks to the tune of trillions of dollars. These powerful mechanisms are enough such that the government does not have to resort to gouging student loan customers through interest rates.

  2. #142
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by ttwtt78640 View Post
    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.
    Things may have changed, of course, but when I was in undergrad I had a friend who was planning to go to law school - ergo a field that would get her a decent paying job. She got pulled in to the financial aid office and raked over the coals because they said lawyers were the ones most likely to default on their loans - they knew all the loopholes.

    At any rate, when I did some quick research a few days ago, there was about a 14% default rate on student loans, but the "for profit" schools were a lot higher than the not for profit schools.

    In fiscal 2011, more than 4.7 million student borrowers from about 6,000 schools began repaying loans. Of those, about 650,000 defaulted.

    For public colleges, which educate most postsecondary students, the default rate fell to 12.9 percent from 13 percent a year ago.

    For private nonprofit colleges, the rate fell to 7.2 percent from 8.2 percent.

    For for-profit colleges, the rate fell to 19.1 percent from 21.8 percent.
    National student loan default rate dips to 13.7 percent; still

    But even with the relatively high default rate (business loans in general are more like 4 or 5%) I think student loans are a good investment and should be at a low interest rate. However, I think we need to look at the for profit colleges - those with too low a graduation rate and a high loan default rate should no longer be eligible for the student loan program, in my opinion.

  3. #143
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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.
    Given a credit unworthy person a loan in the first place should be considered a gift. Asking taxpayers to put their own money at risk without recognition is a slap to the face.

    If a person can't afford the loan, find another way to get the education. Just how do you think people did that before this era of easy money, and the exploitation scam Public and Private Colleges and Universities have been pulling?

  4. #144
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by ocean515 View Post
    Given a credit unworthy person a loan in the first place should be considered a gift.
    No its not a gift if you have to repay it. What I am saying is that the government should not gouge customers.

    Quote Originally Posted by ocean515 View Post
    Asking taxpayers to put their own money at risk without recognition is a slap to the face.
    The government has spent trillions of dollars in Iraq on the pretext of a wild goose chase WMD charge. Not only that but the government, through its empowered agent the Federal reserve, provided trillions of dollars in debt relief to banks. Not only that but the government garnishes wages and income tax returns. Therefore it should not gouge student loan customers through interest rates.

    Quote Originally Posted by ocean515 View Post
    If a person can't afford the loan, find another way to get the education.
    You don't gouge student loan customers because they must have a higher education to be able to earn a living wage.

  5. #145
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by MildSteel View Post
    No its not a gift if you have to repay it. What I am saying is that the government should not gouge customers.



    The government has spent trillions of dollars in Iraq on the pretext of a wild goose chase WMD charge. Not only that but the government, through its empowered agent the Federal reserve, provided trillions of dollars in debt relief to banks. Not only that but the government garnishes wages and income tax returns. Therefore it should not gouge student loan customers through interest rates.



    You don't gouge student loan customers because they must have a higher education to be able to earn a living wage.
    I guess we have a different opinion on what "gouging" is. Sorry, but I don't see it the same way you do.

  6. #146
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    Re: Are student loan interest rates to high?

    As was pointed out before, interest rates aren't really the real problem, the amount of the loan is.



    And like the rest of our economy, I'm willing to wager the culprit is the same...skyrocketing executive pay. I wonder how much more per year the president of whatever college makes vs his staff, rank and file? And I wonder how much of an increase that current pay is from, say, 2004?
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    Reports indicate that everyone knew he was hauling a bunch of guns up there. But, since you brought it up, there's something which should be illegal: guns that breakdown.

  7. #147
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by MildSteel View Post
    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.
    Yea, I did it pushing a mower, gardening etc. It really just depends on how hard you are willing to work. Not to say that there isn't a place for loans, I just don't think (actually I know for certain) that it's optional. Therefore you pay the going rate and appreciate the opportunity it affords you.

    BTW. There is no doubt that "easy money" in the system is what allows tuitions to grow faster than inflation, consistently and by a large margin. If rates were even lower, tuitions would grow even faster. The universities will suck every dime they can out of each student, and the students will passively allow it because they have been conditioned to believe that debt is the norm. Bad bad bad.
    "It is only when men contemplate the greatness of God that they can come to realize their own inadequacy." Jean Calvin

  8. #148
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by johndylan1 View Post
    Yea, I did it pushing a mower, gardening etc. It really just depends on how hard you are willing to work. Not to say that there isn't a place for loans, I just don't think (actually I know for certain) that it's optional. Therefore you pay the going rate and appreciate the opportunity it affords you.

    BTW. There is no doubt that "easy money" in the system is what allows tuitions to grow faster than inflation, consistently and by a large margin. If rates were even lower, tuitions would grow even faster. The universities will suck every dime they can out of each student, and the students will passively allow it because they have been conditioned to believe that debt is the norm. Bad bad bad.
    Almost seems like we need some kind of...negotiation agency for tuition...

    Students/parents pay a consulting fee and get help bargaining for the best price, or whatever. Would only work if everyone did it though - at least for a given area.
    Education.

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  9. #149
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by KevinKohler View Post
    As was pointed out before, interest rates aren't really the real problem, the amount of the loan is.



    And like the rest of our economy, I'm willing to wager the culprit is the same...skyrocketing executive pay. I wonder how much more per year the president of whatever college makes vs his staff, rank and file? And I wonder how much of an increase that current pay is from, say, 2004?
    Elizabeth Warren, the great hero of the left who has people convinced that student loan interest rates are a problem, earned $430,000 from Harvard in 2011 alone, teaching attorneys how to make it easy to file bankruptcies which result in more charged off balances that get passed on to the rest of us.

    In 2011 Harvard president Drew Faust earned $874,559 in salary and benefits.

    I wouldn't worry about the "staff, rank and file" at Harvard.
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by ocean515 View Post
    I guess we have a different opinion on what "gouging" is. Sorry, but I don't see it the same way you do.
    Well ocean, gouging is taking advantage of people with a need to charge them more than necessary. It is disgusting that a parent who wants to borrow $100,000 for medical school for his kid is forced to pay 8.5 percent interest when the government is paying 2.5 percent interest on a 30 year loan. That is a hell of a spread. That is gouging.

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