View Poll Results: Are high student loan interest rates a form of tax on the middle class?

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Thread: Are high student loan interest rates a form of tax on the middle class?

  1. #101
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    Re: Are high student loan interest rates a form of tax on the middle class?

    Quote Originally Posted by MildSteel View Post
    By all means, the government should stop charging such high interest rates.
    Apparently, you don't know how to read. If you don't like the terms of the loan, don't take out the loan. That doesn't translate into changing the terms of the loan.
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  2. #102
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    Re: Are high student loan interest rates a form of tax on the middle class?

    Quote Originally Posted by Cephus View Post
    Apparently, you don't know how to read. If you don't like the terms of the loan, don't take out the loan. That doesn't translate into changing the terms of the loan.
    Apparently you don't know what democracy means. Since I am taxed to the tune of thousands of dollars each year by the Federal Government, I get to voice my opinion on government policy. The interest that the government is charging is too high. If you don't like me saying that, then don't live in a democracy.

  3. #103
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    Re: Are high student loan interest rates a form of tax on the middle class?

    Quote Originally Posted by MildSteel View Post
    What is in order is an understanding that the loans are not for the sake of making a profit in that manner that private lending institutions make loans. Rather they are to facilitate higher education. As such, the interest rates are too high.

    That said, I notice your avatar. You should see what the tuition rates are for UT Austin these days. Factor in room and board, and those are some hefty costs.
    The current default rate for student loans is about 14% so where, exactly, is the profit that you allege? The cost of college has no bearing on student loan interest rates.
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  4. #104
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    Re: Are high student loan interest rates a form of tax on the middle class?

    Quote Originally Posted by digsbe View Post
    Absolutely. They aren't forgiven with bankruptcy, can be taken out of federal tax returns and if deliquint the government can remove professional licenses.
    No doubt about it. If the loan was federally insured, Uncle Sam will get his money, unless the borrower dies destitute. He'll even dock your Social Security benefits:

    If you owe money on a student loan, it doesn't matter how long ago you were in school. A 2005 U.S. Supreme Court case (Lockhart v. U.S.) determined there is no statute of limitations on Social Security offsets to repay student loans. The government can shave off up to 15 percent, provided your remaining monthly benefit doesn't drop lower than $750.

    Read more: Can Social Security Be Garnished? | Bankrate.com
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  5. #105
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    Re: Are high student loan interest rates a form of tax on the middle class?

    Quote Originally Posted by MildSteel View Post
    Apparently you don't know what democracy means. Since I am taxed to the tune of thousands of dollars each year by the Federal Government, I get to voice my opinion on government policy. The interest that the government is charging is too high. If you don't like me saying that, then don't live in a democracy.
    Actually, without the federal guarantee rates on federally-insured student loans would be higher. If you don't believe me, compare private loan rates against Uncle's for students with average to poor credit and/or without a cosigner. For example, Discover, a large student loan lender, is currently advertising a variable rate on uninsured loans of LIBOR + 8.49% and a fixed rate as high as 11.24%. With a default rate on federal loans of 9%, my opinion as a taxpayer is the federal government should get out of the business of insuring student loans:

    “If you think about the trillion dollars of student loans we have outstanding, there’s no way students are going to pay it back.... ”

    Ackman Says Student Loans Are the Biggest Risk in the Credit Market - Bloomberg Business
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  6. #106
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    Re: Are high student loan interest rates a form of tax on the middle class?

    Quote Originally Posted by ttwtt78640 View Post
    The current default rate for student loans is about 14% so where, exactly, is the profit that you allege?
    Do you have a link for that default rate? Not only that but the government has the mechanism of wage garnishment to protect itself from the losses associated with default.

    According to this source the government made $41 billion dollars in profit from student loans, depending on how the accounting is done.

    Government books $41.3 billion in student loan profits

    The federal government made enough money on student loans over the last year that, if it wanted, it could provide maximum-level Pell Grants of $5,645 to 7.3 million college students.

    The $41.3 billion profit for the 2013 fiscal year is down $3.6 billion from the previous year but it's a higher profit level than all but two companies in the world: Exxon Mobil cleared $44.9 billion in 2012, and Apple cleared $41.7 billion.
    ...
    Government books $41.3 billion in student loan profits

    Quote Originally Posted by ttwtt78640 View Post
    The cost of college has no bearing on student loan interest rates.
    I don't know about that, but that is not the point. I was just noting that it appears that you may have attended UT Austin. If you look at their tuition rates, they have gone up quite a bit. When you factor in room and board and the price of books and supplies, you end up with some whopping expenses.

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    Re: Are high student loan interest rates a form of tax on the middle class?

    Quote Originally Posted by Ahlevah View Post
    Actually, without the federal guarantee rates on federally-insured student loans would be higher. If you don't believe me, compare private loan rates against Uncle's for students with average to poor credit and/or without a cosigner. For example, Discover, a large student loan lender, is currently advertising a variable rate on uninsured loans of LIBOR + 8.49% and a fixed rate as high as 11.24%. With a default rate on federal loans of 9%, my opinion as a taxpayer is the federal government should get out of the business of insuring student loans:
    Although that might be the case, the government should not be profiting from student loan interest rates. The purpose of the loans is to facilitate education, not to make a profit for the government. The government is borrowing money at very low interest rates, but charging my daughter 6.8 percent for her loan. That is quite a big spread in the rate the government borrows money and what they charge my daughter. It is especially ridiculous when you consider that she purchased a car with a loan at 3 percent.

  8. #108
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    Re: Are high student loan interest rates a form of tax on the middle class?

    Quote Originally Posted by MildSteel View Post
    You decided to come into the discussion and say charge the expenses to a credit card in a nasty way. As such, it would be nice if you practiced some restraint if you don't have anything substantial to put forward.



    Good, your lame posts and along with her lame posts waste bandwidth.
    Repetition that the rates are too high may fulfill your own echo chamber, but don't expect to engage in a discussion about loans without discussing the points of what is involved in a loan. That's coming from someone who did charge their college tuition on a credit card. If you didn't discuss the issue of collateral with your daughter, then you do your daughter a disservice and have only created a family echo chamber.

  9. #109
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    Re: Are high student loan interest rates a form of tax on the middle class?

    Quote Originally Posted by MildSteel View Post
    Apparently you don't know what democracy means. Since I am taxed to the tune of thousands of dollars each year by the Federal Government, I get to voice my opinion on government policy. The interest that the government is charging is too high. If you don't like me saying that, then don't live in a democracy.
    And if you don't like the interest rate, don't get the loan. Problem solved.

  10. #110
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    Re: Are high student loan interest rates a form of tax on the middle class?

    Quote Originally Posted by AliHajiSheik View Post
    Repetition that the rates are too high may fulfill your own echo chamber, but don't expect to engage in a discussion about loans without discussing the points of what is involved in a loan. That's coming from someone who did charge their college tuition on a credit card. If you didn't discuss the issue of collateral with your daughter, then you do your daughter a disservice and have only created a family echo chamber.
    If you had bothered to follow the thread you would note the fact that I said the spread between what the government pays to borrow money and what it is charging student loan customers is too large. Not only that but I said that the purpose of the loans should not be to make profit for the government, but rather to facilitate the educational needs of the citizens on the U.S. If you don't have anything else to do but put forward the lame excuse of collateral, then you are doing the people of this forum a disservice by wasting bandwidth with that stale, broken record, mantra.

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