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Are student loan interest rates to high?

Are student loan interest rates to high?

  • Total voters
    43
Fearandloathing said:
The interest rate should be the lowest availble if it is a government supported loan...

but my question is when does it kick in?

By rights it should be two to five years after graduation
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I'm not a big fan of student loans, so I haven't spent much time considering the when and how. I think the availability of student loans has been exploited by Public and Private Universities to the detriment of the students.

In my book, if there are going to be government backed student loan programs, they should only be provided for students seeking degrees in areas where shortages of qualified employment is prevalent. For me that means engineering, and other core fields of study.
 
ttwtt78640 said:
I never stated that was the case, but I would assume that many higher education facilities accept anyone that can get a loan to attend. In Texas (at UT) they take the top 10% of every HS graduating class regardless of SAT scores, although they do limit which degree programs may be selected based on SAT scores.

My point was that employers tend to prefer to interview/hire only those applicants that actually got college degrees, not only those that have "some college".
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I would say where a degree is required it certainly makes sense - but cashier isn't one of those jobs. In fact, I'd probably not hire the college graduate (now thinking about it) because they are over qualified and will most likely leave for a better job quicker than someone who didn't go to college. So I wouldn't want to keep hiring people them leaving and having to rehire repeatedly if I didn't absolutely have to. I did my share of hiring but for very technical jobs which required at least a BS in Computer Science, Information Systems or other related type field with a valid CCNA or CCNP. Even then I'd probably have a 50% turn over rate because they'd be shopping their skills for higher paying jobs. I was more keen on seeking out qualified people who already had experience and not fresh out of college kids.
 
ocean515 said:
That is not the point. Is the interest rate too high, considering the risk?

Have programs been introduced to forgive student loan debt?
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To forgive, not to allow default. This does not increase the risk to the lender, it simply means a change of address for sending out the bill.
 
MildSteel said:
Banks are borrowing money at almost zero percent interest rates. However student loan customers are being gouged at interests rates ranging from 4.7 to 7.2 percent. Why is it that are elected representatives in the government are allowing the people to be robbed in this way?
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Try to get an unsecured loan, lacking any current income, at a lower rate and then get back to us. ;)

The people "getting robbed" are those that subsidize and guarantee these loans and those that must pay the inflated tuition prices which they allow.
 
Fearandloathing said:
The interest rate should be the lowest availble if it is a government supported loan...

but my question is when does it kick in?

By rights it should be two to five years after graduation
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Mine started 6 months after graduation. You can defer them, but that just builds interest.
 
Ockham said:
How is that proven? How does accumulating enough credits to graduate prove my reliability?
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Because failure to show up to class more than a few times results in a fail. At least it did at my college. I think you had, like, 3 sick days, allowable.
 
Ockham said:
Yeah, he was just over yesterday and mentioned his student loan at one point was 14%. My jaw dropped. My Mom and Dad in the mid 1960's took out a mortgage on their new house at 12% as I still have the paperwork on it. Maybe he was wrong but that's what he told me yesterday. I have to ask him about it at Easter when I see him next - which bank he took out the loan and the particulars.
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My wife has loans through Sally Mae, and while I don't think any of them ever made it to 14%, I believe at one point it was at 12% or so. And since Sally Mae is considered private, they can deny you for consolidation, and keep the interest in flux with the market.
 
KevinKohler said:
Because failure to show up to class more than a few times results in a fail. At least it did at my college. I think you had, like, 3 sick days, allowable.
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Yes, there's a correlation between class attendance and passing, but there are many institutions that don't have an attendance policy, generally larger ones that aren't as dependent on state funding (in many states funding is figured on student contact hours, and this includes the number of warm bodies in each classroom).
 
ocean515 said:
I'm not a big fan of student loans, so I haven't spent much time considering the when and how. I think the availability of student loans has been exploited by Public and Private Universities to the detriment of the students.

In my book, if there are going to be government backed student loan programs, they should only be provided for students seeking degrees in areas where shortages of qualified employment is prevalent. For me that means engineering, and other core fields of study.
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Absolutely. Don't put tax payers on the dole for every single liberal arts degree seeker who wants to stay in the bubble for as long as they can prior to crashing into "real life".
 
ocean515 said:
I am aware these programs exist. The suggestion there is no way to discharge the original promise is not true.

That was my point.
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But it's not correct. A bank doesn't care WHO pays back the loan, only that it's paid back...with interest. So, again, student loans are the safest bet in town, by a mile.
 
Ockham said:
I would say where a degree is required it certainly makes sense - but cashier isn't one of those jobs. In fact, I'd probably not hire the college graduate (now thinking about it) because they are over qualified and will most likely leave for a better job quicker than someone who didn't go to college. So I wouldn't want to keep hiring people them leaving and having to rehire repeatedly if I didn't absolutely have to. I did my share of hiring but for very technical jobs which required at least a BS in Computer Science, Information System or other related type field with a valid CCNA or CCNP. Even then I'd probably have a 50% turn over rate because they'd be shopping their skills for higher paying jobs. I was more keen on seeking out qualified people who already had experience and not fresh out of college kids.
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Adding "with experience" to having a specialized college degree changes nothing because to get that experience also required the degree. I never said, or even implied, that all jobs required a college degree - I simply stated that employers often use the college degree requirement as a filter to limit the applicant pool.
 
kids shouldn't have to go into debt if they complete the degree. putting a paywall between the student and education / job training is stupid.

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KevinKohler said:
But it's not correct. A bank doesn't care WHO pays back the loan, only that it's paid back...with interest. So, again, student loans are the safest bet in town, by a mile.
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Well, I guess if you're a banker, that could be true. If you're a taxpayer, not so much.
 
ocean515 said:
I am aware these programs exist. The suggestion there is no way to discharge the original promise is not true.

That was my point.
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Ok. That's cool. When you asked the question, I didn't realize it was rhetorical.
 
The rates are indeed high, but it is not the problem. The problem is schools pricing themselves higher than returns for students.
 
KevinKohler said:
Because failure to show up to class more than a few times results in a fail. At least it did at my college. I think you had, like, 3 sick days, allowable.
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:lamo

Perhaps that's with your school, it wasn't with mine. And showing up for class doesn't relate to proving reliability in the work force....
 
ttwtt78640 said:
Adding "with experience" to having a specialized college degree changes nothing because to get that experience also required the degree. I never said, or even implied, that all jobs required a college degree - I simply stated that employers often use the college degree requirement as a filter to limit the applicant pool.
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I know you didn't say that, but it was implied.... as stated, I'll take a non-college grad who sticks around over a college grad for a cashier position any day and twice on Sunday.
 
Ockham said:
I know you didn't say that, but it was implied.... as stated, I'll take a non-college grad who sticks around over a college grad for a cashier position any day and twice on Sunday.
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As would I, in fact, I would take an "undocumented" cashier because they have even fewer options to leave. ;)
 
Helix said:
kids shouldn't have to go into debt if they complete the degree. putting a paywall between the student and education / job training is stupid.

View attachment 67182228
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The taxpayer should not have to assume or subsidize that debt if they do not complete the degree either. Your presented data show that completing a "free" public HS education makes a huge difference in earnings (and the "need" for public assistance), yet we subsidize those that "opt out" of completing that education as well.
 
ttwtt78640 said:
The taxpayer should not have to assume or subsidize that debt if they do not complete the degree either. Your presented data show that completing a "free" public HS education makes a huge difference in earnings (and the "need" for public assistance), yet we subsidize those that "opt out" of completing that education as well.
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we shouldn't let them drop out of high school. that is a stupid decision, and it has no benefits for either the individual or for society.
 
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