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

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


  • Total voters
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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.
 
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.
 
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.
 
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
 
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
 
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

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.
 
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.
 
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.
 
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.
 
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.
 
And if you don't like the interest rate, don't get the loan. Problem solved.

Because I pay a substantial amount of income tax, I have the right to say that I feel that the interest rates are too high, and why I feel that is the case. If you don't like me saying that, don't listen. Problem solved.
 
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



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.

Then don't attend college.

It is your Democratic choice.

Or, get the excellent grades required for a scholarship, and cost could be Zero.
 
Then don't attend college.

It is your Democratic choice.

Or, get the excellent grades required for a scholarship, and cost could be Zero.

If you don't like the fact that I can voice my opinion on what I think student loan interest rates, then don't listen, or don't live in a democracy. That is your choice.

My daughter had good grades and got scholarships. The cost of the education that she got was so expensive that the scholarships were not enough.
 
If you don't like the fact that I can voice my opinion on what I think student loan interest rates, then don't listen, or don't live in a democracy. That is your choice.

My daughter had good grades and got scholarships. The cost of the education that she got was so expensive that the scholarships were not enough.

That's why God gave us cheaper schools.

Don't like the cost, don't go to the school.

Why whine about a conscious decision that you already made?
 
That's why God gave us cheaper schools.

Don't like the cost, don't go to the school.

Why whine about a conscious decision that you already made?

Did you read what I said? I said MY DAUGHTER, NOT ME, got scholarships that were not enough to cover the expenses. Get it? Not only that but I said that the LOAN INTEREST RATES WERE TOO HIGH. Get it?
 
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.

And you've done nothing to demonstrate what the spread should be other than vague references to just enough to cover expenses. Do you even know what the expenses are that government incurs? Perhaps your daughter won't debate you but plenty here will.

And don't worry about my bandwidth, I've got plenty.
 
Did you read what I said? I said MY DAUGHTER, NOT ME, got scholarships that were not enough to cover the expenses. Get it? Not only that but I said that the LOAN INTEREST RATES WERE TOO HIGH. Get it?

You knew the rates before signing the paperwork, but yet you still whine about it?

SO you elected not to counsel her about the cost of education
 
And you've done nothing to demonstrate what the spread should be other than vague references to just enough to cover expenses. Do you even know what the expenses are that government incurs?

Did you know that there is a report that the government profited $41 billion dollars from student loans? Did you read the thread to find that out? Or did you just jump in and make another stupid post.

Perhaps your daughter won't debate you but plenty here will.

I sincerely hope they do a better job than you are doing.

And don't worry about my bandwidth, I've got plenty.

You may have plenty, but your posts are a waste of it.
 
You knew the rates before signing the paperwork, but yet you still whine about it?

SO you elected not to counsel her about the cost of education

No, my daughter took out the loan, and she is paying it back. Do you understand that? What I am saying is that the interest rates the she is paying are too high. Do you understand that?
 
Did you read what I said? I said MY DAUGHTER, NOT ME, got scholarships that were not enough to cover the expenses. Get it? Not only that but I said that the LOAN INTEREST RATES WERE TOO HIGH. Get it?

So, you elected not to counsel her about the cost of education, the long term effect of interest rates, and did not discuss applying to cheaper schools?

In other words, you were not involved in her college choice, but decided to now complain about interest rates that you had no involvement with, and you do not have to pay?
 
No, my daughter took out the loan, and she is paying it back. Do you understand that? What I am saying is that the interest rates the she is paying are too high. Do you understand that?

So your daughter made this decision by herself with no input from you, and now you choose to complain about the interest rates?

Really?
 
So, you elected not to counsel her about the cost of education, the long term effect of interest rates, and did not discuss applying to cheaper schools?

What I am saying is that my daughter took out the loan. Do you understand that? My daughter is paying back the loan. Do you understand that? I AM SAYING that the interest rate she is paying on the loan is too high. Do you understand that?

In other words, you were not involved in her college choice, but decided to now complain about interest rates that you had no involvement with, and you do not have to pay?

In other words what you are saying is that you don't really have anything substantial to say about what the loan interest rates should be, but rather are making unsubstantiated claims about things that you nothing about to mask your inability to make a substantial argument on the subject matter that is being discussed.
 
So your daughter made this decision by herself with no input from you, and now you choose to complain about the interest rates?

Really?

So you are making unsubstantiated claims about things that you know nothing about to mask your lack of ability to make a substantial contribution to the subject matter?

Really?

Interesting.
 
No, my daughter took out the loan, and she is paying it back. Do you understand that? What I am saying is that the interest rates the she is paying are too high. Do you understand that?

Maybe she should have looked at the interest rate before signing the paperwork, eh?

Why would you complain on the internet about the rates as opposed to help her make decisions about her education prior to signing the paperwork?

If you had determined that the interest rates were too high before signing the loan, all of this would have been avoided.

Day late, dollar short, eh?
 
So you are making unsubstantiated claims about things that you know nothing about to mask your lack of ability to make a substantial contribution to the subject matter?

Really?

Interesting.

Ah, so you told her to sign the paperwork, knowing the interest rate up front.

I see.
 
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