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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
    28
Your argument is unacceptable for the following reasons:

1. It ignores the possibility that the borrower may be under pressure from social, economic, or violent coercion.

If I'm a lender, I don't care what the borrower's story is. I only care about one thing: Will he pay the money back? Now, if the lender is the federal government and it wishes to engineer social policy, I can think of other, more efficient ways to do this. Personally, I think we're turning out too many psych and marketing majors and not enough engineers and yet the Department of Education treats each graduate the same regarding his or her ability to repay the debt. Meanwhile, private investors are more than happy to offer better terms to lower-risk prospects.

2. It ignores that borrowers may have been subjected to deceptive lending practices.

I'm old school: Caveat emptor. Besides, we have consumer lending laws that are designed to protect the public, but if the the Department of Education is engaging in deceptive lending practices then we really have a problem. Can you describe these, please? Because my guess is the bigger problem is people simply don't read and understand what it is they're signing.

3. It ignores the fact that monopolies have substantial power to set rates and erode the principles of freedom that are supposed to be associated with free markets.

In this case, the federal government is the entity swinging its balls around by offering subsidized rates. If a private entity tried to do what Uncle Sam is doing (say, not charging any interest on subsidized loans while the student is in school and charging a below-market rate once the grace period ends) it would be charged with predatory pricing.

As such, because it thus renders the concepts justice and fairness sterile, it should be rejected to the pile of useless, rubbish ideas by the discerning mind.

Now you're engaging in opinion. "Fairness" and "justice" are two-sided coins. For example, what's fair when a borrower promises to repay a loan but stiffs the lender, even if he has the ability to repay the loan?
 
When two thirds of the people do NOT have a college degree, for it to be taken as gospel that only people with a college degree should be entitled to a "living wage" is insanity. It's just insane.

I think the country is losing it's mind.

Dystopia here we come.

A college degree has nothing to do with what I said. If you think you MUST have a college degree in order to earn a "living wage" (whatever that may be), then you're definitely part of the problem.
 
A college degree has nothing to do with what I said. If you think you MUST have a college degree in order to earn a "living wage" (whatever that may be), then you're definitely part of the problem.

It is not absolutely true, but it is generally true these days. Otherwise you will be stuck in some service job flipping burgers.
 
I'm old school: Caveat emptor. Besides, we have consumer lending laws that are designed to protect the public, but if the the Department of Education is engaging in deceptive lending practices then we really have a problem. Can you describe these, please? Because my guess is the bigger problem is people simply don't read and understand what it is they're signing.

What you said was:

No, actually, he has a point. When is a rate too high? Is it when the lender makes a profit? Or is it when the borrower walks away from signing on the dotted line? I would argue that the rate is not too high if the borrower agrees to pay it.

That is a general statement about rates.
 
It is not absolutely true, but it is generally true these days. Otherwise you will be stuck in some service job flipping burgers.

I am a hs graduate college drop out and I make 43K a year
 
That is a general statement about rates.

Yeah, so what? The same principle applies to any loan, whether it's one from Mom and Dad or one from the Department of Education. In fact, the OP starts out making the assumption that student loan rates are too high. I reject that premise and think it's leading. He comes to this conclusion based simply on the fact that his daughter's student loan debt cost more than twice as much as her auto loan. Who knows? Maybe the car salesman gave her a great deal on financing and gouged her on the price of her car so that, in fact, her education loan was the better deal. In fact, if she studied something useful like engineering she definitely got a bargain compared to the depreciating asset called an automobile.
 
I am a hs graduate college drop out and I make 43K a year

Steve Jobs was a college dropout. So were Bill Gates and Mark Zuckerberg. And this guy quit school when he was 12:

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Steve Jobs was a college dropout. So were Bill Gates and Mark Zuckerberg. And this guy quit school when he was 12:

View attachment 67183272

Well you also have to remember they were incredibly intelligent and gifted which meant they did not stand to gain much from university education. This is not the case for most people.
 
Well you also have to remember they were incredibly intelligent and gifted which meant they did not stand to gain much from university education. This is not the case for most people.

True, but how much money do we lend to average people or even, shall I say, the academically challenged? I mean, what are we to do when our supposed best and brightest don't even know the capital of Canada?

 
Yeah, so what? The same principle applies to any loan, whether it's one from Mom and Dad or one from the Department of Education. In fact, the OP starts out making the assumption that student loan rates are too high. I reject that premise and think it's leading. He comes to this conclusion based simply on the fact that his daughter's student loan debt cost more than twice as much as her auto loan. Who knows? Maybe the car salesman gave her a great deal on financing and gouged her on the price of her car so that, in fact, her education loan was the better deal. In fact, if she studied something useful like engineering she definitely got a bargain compared to the depreciating asset called an automobile.

I'm of the mind any interest rate is too high for a car. Why pay interest to tie up in some cases over 100% of your net worth in a rapidly depreciating asset? This is america, there's a car on ever street paying attention for deals can get you a reliable used car for cash
 
If I'm a lender, I don't care what the borrower's story is. I only care about one thing: Will he pay the money back?

That you don't give a damn about the suffering of others is meaningless. The reason that we have government is to ensure that people are not victimized by fools, under the influence of greed, who want to usurp all of the resources available to human society for their personal aggrandizement. It is not there to facilitate such idiots in their stupid endeavor. The purpose of the government making the loans should therefore be to facilitate education, nothing more. It should not be a money making scheme devised by people with the mentality of loan sharks to give an excuse to lower taxes for the wealthy.
 
I'm old school: Caveat emptor. Besides, we have consumer lending laws that are designed to protect the public, but if the the Department of Education is engaging in deceptive lending practices then we really have a problem. Can you describe these, please? Because my guess is the bigger problem is people simply don't read and understand what it is they're signing.

You made a general statement concerning interest rates when you said no rate was too high if the borrower agreed to pay. That is a bogus bunch of baloney because if we take that as true then the ridiculous notion of someone agreeing to pay 1000 percent interest on a loan, because someone held a gun to his head and threatened to kill him if he didn't agree, would become acceptable. So your statement was bogus.
 
That you don't give a damn about the suffering of others is meaningless. The reason that we have government is to ensure that people are not victimized by fools, under the influence of greed, who want to usurp all of the resources available to human society for their personal aggrandizement. It is not there to facilitate such idiots in their stupid endeavor. The purpose of the government making the loans should therefore be to facilitate education, nothing more. It should not be a money making scheme devised by people with the mentality of loan sharks to give an excuse to lower taxes for the wealthy.

Oh my gosh you're so far out in conspiracy land it's laughable. Forty years ago people would've committed murder to get loans in excess of 20k unsecured for six percent. Jesus H Christ no one with real work ethic is suffering because they willingly borrowed money at six percent. If you spent 40 k to get a degree that's twenty four hundred dollars! Tell the OPs precious snowflake to sell the car she finances at three percent (and really only someone who sucks at math, which is probably why his daughter is in a predicament with financing, would finance a car) and then that interest can be paid in full. Six Fing percent is not a conspiracy
 
You made a general statement concerning interest rates when you said no rate was too high if the borrower agreed to pay. That is a bogus bunch of baloney because if we take that as true then the ridiculous notion of someone agreeing to pay 1000 percent interest on a loan, because someone held a gun to his head and threatened to kill him if he didn't agree, would become acceptable. So your statement was bogus.

Oh so now there's teams of mobsters roaming the streets breaking your kneecaps if you don't go to school on credit?
 
In this case, the federal government is the entity swinging its balls around by offering subsidized rates. If a private entity tried to do what Uncle Sam is doing (say, not charging any interest on subsidized loans while the student is in school and charging a below-market rate once the grace period ends) it would be charged with predatory pricing.

The government is not a private entity and it is good they are making the loans. What is not good is that they are trying to charge interest rates that are unnecessarily high. Because the government has resources at it disposal that far exceed the capabilities of private lenders, it can provide rates much lower than what private lenders are reasonably capable of. That is good because the government can thus facilitate the educational needs of citizens, while at the same time lowering their debt burden. The less debt that students have when they graduate, the more they can spend on consumption in the private sector which stimulates the economy.
 
Now you're engaging in opinion. "Fairness" and "justice" are two-sided coins. For example, what's fair when a borrower promises to repay a loan but stiffs the lender, even if he has the ability to repay the loan?

The ridiculous statement that no interest rate is too high if the borrower agrees to pay, if accepted as true, renders the concepts of fairness and justice meaningless for reasons that I have already stated. Again it would mean that it is fair and just to hold a gun to someone's head and get them to agree to pay back a loan with 10000 percent interest. If you think that is fair and just, then your thinking is severely distorted.
 
Oh my gosh you're so far out in conspiracy land it's laughable.

That conspiracy dog is a desperate attempt that will not hunt. The rates are too high when we consider that the government is not a private lender, and has resources at its disposal that far exceed those of private lenders.
 
You made a general statement concerning interest rates when you said no rate was too high if the borrower agreed to pay. That is a bogus bunch of baloney because if we take that as true then the ridiculous notion of someone agreeing to pay 1000 percent interest on a loan, because someone held a gun to his head and threatened to kill him if he didn't agree, would become acceptable. So your statement was bogus.

agreeing to a loan like that is not enforceable....and you know it

we have a whole new agency of the federal government setup just so the poor people wont be taken advantage of

CFPB > Consumer Financial Protection Bureau

Your complaint is more than data—it’s your story

While you can see hundreds of thousands of complaints in the Consumer Complaint Database, these complaints are much more than just data to us. They reflect real and tough challenges people face every day as they try to navigate the financial world. Now we’re giving you the choice to publish your story in our Consumer Complaint Database and help others see what’s happening in the financial marketplace. Learn more about how we’re lifting your voice.

maybe you guys need to take up your complaints with them
 
agreeing to a loan like that is not enforceable....and you know it

Apparently you don't understand what is being said. He said that no interest rate is too high if the borrower agrees to pay. IF THAT IS TRUE, then we would have accept that if someone put a gun to someone's head and forced them to agree to repay a loan at 10000000 percent interest, that rate would not be too high. Its a stupid notion and that is the point.
 
That you don't give a damn about the suffering of others is meaningless. The reason that we have government is to ensure that people are not victimized by fools, under the influence of greed, who want to usurp all of the resources available to human society for their personal aggrandizement. It is not there to facilitate such idiots in their stupid endeavor. The purpose of the government making the loans should therefore be to facilitate education, nothing more. It should not be a money making scheme devised by people with the mentality of loan sharks to give an excuse to lower taxes for the wealthy.

You wandered into the wrong section. We have a Conspiracy Theory section meant just for posts such as this one.
 
You wandered into the wrong section. We have a Conspiracy Theory section meant just for posts such as this one.

You have wandered into discussion that is beyond shallow insults.
 
That conspiracy dog is a desperate attempt that will not hunt. The rates are too high when we consider that the government is not a private lender, and has resources at its disposal that far exceed those of private lenders.

Desperate about what? I'm not desperate, I am fine with the status quo, it's no skin off of my teeth, you must be the desperate one because in reality, no one cares about your opinion on interest rates. Any rational person understands 6% to be a bargain. I really don't mind the government profit on it either, they might as well make money on something
 
The government is not a private entity and it is good they are making the loans. What is not good is that they are trying to charge interest rates that are unnecessarily high. Because the government has resources at it disposal that far exceed the capabilities of private lenders, it can provide rates much lower than what private lenders are reasonably capable of. That is good because the government can thus facilitate the educational needs of citizens, while at the same time lowering their debt burden. The less debt that students have when they graduate, the more they can spend on consumption in the private sector which stimulates the economy.


what happens with the loans that default....and are never repaid?

who pays for those?

just another line item on the budget?

the rate is at 6% because not every student pays them back

again....20+ pages of bitching that 6% rates are too high is about as much as i can take

thank god your precious little daughter didnt have to get a loan in the early eighties!!
 
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