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

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  • Yes

    31 70.45%
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    9 20.45%
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Thread: Are student loan interest rates to high?

  1. #171
    Villiage Idiot
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by tres borrachos View Post
    Those rates are going to be killer if inflation ever results in the 18% interest rates we had once upon a time not so long ago. Then these people will be thanking doG that they have a loan with a 4.66% interest rate while their bank is paying them 15% on a 36 month CD.
    Absolutly.

    But I doubt that we will ever see the 18% prime rate again. Interest rates are a function of inflation and tend to follow inflation closely. The high inflation rates that we were experiencing during the late 70s and early 80s were the result of cost push inflation due to OPEC embargos which resulted in oil going from $12 to $80 in less than five years.
    Quote Originally Posted by ocean515 View Post
    ...I'm not interested in debating someone who is trolling for an argument....
    Quote Originally Posted by Papa bull View Post
    I see a big problem with the idea that whatever the majority wants is OK.

  2. #172
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by tres borrachos View Post
    Companies shouldn't have their financial obligations eliminated either. I've said that repeatedly.

    Bankruptcy should not be easy - and it shouldn't be viewed through the lens of "it's the lender's risk". No, it's your obligation. Their risk isn't your concern if you borrow the money.

    Everyone else pays for your bankruptcy.

    Which is why one of my credit cards has an interest rate of 28% (I make sure never to leave a balance on that card)

    Yes, when you enter into a contract, the lender knows you might default; that's why they peg the interest where they do. No right to bankruptcy? signing a contract doesn't make you an indentured servant - unless it's a student loan.

    But that's really off topic from here. sorry.

  3. #173
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by Geoist View Post
    And I don't really see how it is such a "risky" loan when the Department of Education's "profits" $40 billion a year off student loans. Either return that excess money to the former students or lower their interest rates.
    Excellent post! Excellent!

    I knew they were gouging people. There you go. The interests rates are too damn high.

    Great post!!!! Thank you very, very much for that insight!

  4. #174
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by imagep View Post
    It's not gouging, but the government makes a profit off of student loans and almost every one eventually repays their loans in full with interest so there is really little risk factor to the government.

    I find that the student loan program is a reasonable compromise, between the federal tax payer having to subsidize individuals college or having a nation without ample college graduates - but there is no reason that the government has to run the program at a profit, and no reason that student loans can't be made at the same rates that banks can borrow money at.
    and when banks ran the program, THEY made the money, but the govt assumed the risk. Much better to have the students borrow directly from the govt, so that any profits do go to financing more student loans. But I agree the profits should be minimal.

  5. #175
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by ocean515 View Post
    As I wrote, we have different opinions on what "gouging" is.
    A six percent spread is gouging.

  6. #176
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by ocean515 View Post
    I thought I would check on the current interest rates reported for student loans. This is what I found.

    https://studentaid.ed.gov/about/anno.../interest-rate

    These rates appear to be different from the 8.5% rate you've posted. Why is the rate you're showing higher than what I see in the table?
    I had posted earlier the rate range that you posted. In addition, there is a certain type of loan that a parent might take out to, for example, send their kid to medical school, or a graduate student. It is called a Federal Plus loan and that rate is a whopping 8.5% regardless of creditworthiness. That is a 6 percent spread over the highest rate the the government borrows money. It is gouging, no doubt about it.

    https://studentaid.ed.gov/types/loans/interest-rates

  7. #177
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by imagep View Post
    Absolutly.

    But I doubt that we will ever see the 18% prime rate again. Interest rates are a function of inflation and tend to follow inflation closely. The high inflation rates that we were experiencing during the late 70s and early 80s were the result of cost push inflation due to OPEC embargos which resulted in oil going from $12 to $80 in less than five years.
    I hope we don't see 18% again, but I don't know. I didn't think oil prices would drop as fast as they did either.

  8. #178
    Villiage Idiot
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by MildSteel View Post
    I hope we don't see 18% again, but I don't know. I didn't think oil prices would drop as fast as they did either.
    From the Bush era oil high, oil would have to go to $950 a barrel to match the rise in price we saw during the Carter/early Reagan era. With US oil production increasing, I doubt that's going to happen again. OPEC isn't the cohesive alliance it used to be and will probably never be again.

    Double digit inflation is possible, and that would cause double digit interest rates, but neither are likely.
    Quote Originally Posted by ocean515 View Post
    ...I'm not interested in debating someone who is trolling for an argument....
    Quote Originally Posted by Papa bull View Post
    I see a big problem with the idea that whatever the majority wants is OK.

  9. #179
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by Ockham View Post
    How does one gain acceptance into College without a basic grasp of math and english?
    I'm fairly sure that the community colleges in my area provide what are basically remedial courses for people with issues math and such.

    High school algebra and earlier, even.
    Education.

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

  10. #180
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    Re: Are student loan interest rates to high?

    Quote Originally Posted by KevinKohler View Post
    Sally Mae. That sounds like a Sally Mae private loan.
    Guess I got lucky on the one I let myself get maneuvered into.

    As I have a Sallie Mae private loan with less interest than that.
    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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