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Should Student Loan Interest Rates Be Lowered Below 4%?

Should Student Loan Interest Rates Be Lowered Below 4%?

  • Yes

    Votes: 9 39.1%
  • No

    Votes: 10 43.5%
  • Other

    Votes: 4 17.4%

  • Total voters
    23

TheDemSocialist

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Most student loan interest rates are at 7% or above. There has been some legislation introduced in congress that calls for student interest rates be lowered to below 4%. Do you support these rates?
 
Most student loan interest rates are at 7% or above. There has been some legislation introduced in congress that calls for student interest rates be lowered to below 4%. Do you support these rates?

Student loans are fairly high risk loans. I would not mandate rates be lowered.
 
Student loans are fairly high risk loans. I would not mandate rates be lowered.
I would tend to agree.

If they really want to help students more, skip right to grants instead of loans.
 
I would tend to agree.

If they really want to help students more, skip right to grants instead of loans.

I know plenty of folks that get grants. Based on my personal observation the college grant program is fraught with waste and abuse. For example I know of a young man who hatched a plan to get a gaming computer. Apply for Jr college classes enroll and receive grants, drop all but the minimum amount of courses by the deadline and receive a refund on tuition, do not buy books and have enough left to buy a good gaming computer. This young man never intended to stay in school, he went two semesters and passed a total of three classes. He wanted computer equipment and he got it.

Grants should be tied to performance.
 
Most student loan interest rates are at 7% or above. There has been some legislation introduced in congress that calls for student interest rates be lowered to below 4%. Do you support these rates?

I believe that the student loan interest rates should be raised to 51% until after you graduate DemSocialist. :lol:

Once you're off campus, lower them down to 1.5%.
 
I believe that the student loan interest rates should be raised to 51% until after you graduate DemSocialist. :lol:

Once you're off campus, lower them down to 1.5%.

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Student loans are fairly high risk loans. I would not mandate rates be lowered.

They're not risky at all, they cannot be discharged in bankruptcy or gotten away from in any other way. They will be repaid eventually unless the individual drops dead right after graduation.
 
Most student loan interest rates are at 7% or above. There has been some legislation introduced in congress that calls for student interest rates be lowered to below 4%. Do you support these rates?

For me it depends on the type of loan it is, as I don't think the government in general should be making loans, however, as long as the government/the fed is making/backing near 0% loans for rich bankers I think the same courtesy should be extended to our students.
 
Most student loan interest rates are at 7% or above. There has been some legislation introduced in congress that calls for student interest rates be lowered to below 4%. Do you support these rates?

Why should student loans have lower than market rates? Could you explain that?
 
Because the Fed bailed out the big banks. All student loan debt should be forgiven. Just put it all on the Fed's books, along with all that toxic mortgage debt from the banks.
 
Most student loan interest rates are at 7% or above. There has been some legislation introduced in congress that calls for student interest rates be lowered to below 4%. Do you support these rates?

I think student loan rates should be lowered to 2% over the discount rate. Why they're 7% is beyond me. Delinquent paying your student loan? Not a penny income tax refund until you're caught up.
 
Are we talking about private lenders or the government?
 
They're not risky at all, they cannot be discharged in bankruptcy or gotten away from in any other way. They will be repaid eventually unless the individual drops dead right after graduation.

How many student loan borrowers struggle with repayment?


• Of the 37 million borrowers who have outstanding student loan balances, 14%, or about 5.4 million borrowers, have at least one past due student loan account.


• Of the $870B-$1T in outstanding student loan debt, approximately $85 billion is past due.
(Source: FRBNY)


• The official FY 2010 two-year national student loan cohort default rate rose to 9.1 percent, up from 8.8 percent in FY 2009, while the three-year rate declined slightly from 13.8 percent to 13.4 percent. (Source: U.S. Department of Education)

• Only about 37 percent of federal student loan borrowers between 2004 and 2009 managed to make timely payments without postponing payments or becoming delinquent.


• For every student loan borrower who defaults, at least two more borrowers become delinquent without default.


• Two out of five student loan borrowers – or 41%- are delinquent at some point in the first five years after entering repayment.


(Source: Institute for Higher Education Policy)


• As of 2012, there are now more than $8 billion in defaulted private loans, or 850,000 distinct loans in default. (Source: CFPB)
 
Student loans are fairly high risk loans. I would not mandate rates be lowered.

How are student loans high risk, when they are one of the only types of loan that even bankruptcy can't get you out of repaying?
 
• Of the 37 million borrowers who have outstanding student loan balances, 14%, or about 5.4 million borrowers, have at least one past due student loan account.

That's not risky for the government, they make money on the past-due fees. That is, in fact, how the entire credit card market works.

• Of the $870B-$1T in outstanding student loan debt, approximately $85 billion is past due.
(Source: FRBNY)

Past due is not the same as never paid. There is no way to get out from under student loan debt.

• Only about 37 percent of federal student loan borrowers between 2004 and 2009 managed to make timely payments without postponing payments or becoming delinquent.

Which, again, isn't the same as being a risky proposition for the government, they make even more money when the delinquent fees are paid.

• As of 2012, there are now more than $8 billion in defaulted private loans, or 850,000 distinct loans in default. (Source: CFPB)

Which, again, isn't in default, they are just late. The only way out of these debts is to die.

So where is the risk to the government, or to the private organizations who are guaranteed their money under the same rules again?
 
We shouldn't be paying interest on student loans because we shouldn't have to be taking out student loans. The Higher Education System in this country is a joke, a sick, perverted joke.
 
That's not risky for the government, they make money on the past-due fees. That is, in fact, how the entire credit card market works.



Past due is not the same as never paid. There is no way to get out from under student loan debt.



Which, again, isn't the same as being a risky proposition for the government, they make even more money when the delinquent fees are paid.



Which, again, isn't in default, they are just late. The only way out of these debts is to die.

So where is the risk to the government, or to the private organizations who are guaranteed their money under the same rules again?

Funny, The stat says "default" and your reply "again isn't in default". Wow, how can you write that? Secondly, I was showing the nature of the risk. Risk isn't only measured in default, it is also measured in loss of revenue from late pay, loss due to forgiveness programs, as well as loss in opportunity costs. These loans are, as I initially stated, relatively high risk. Many never fully repay the loan. Nearly half are delinquent at some time in the life of the loan, that's risky.
 
Funny, The stat says "default" and your reply "again isn't in default". Wow, how can you write that? Secondly, I was showing the nature of the risk. Risk isn't only measured in default, it is also measured in loss of revenue from late pay, loss due to forgiveness programs, as well as loss in opportunity costs. These loans are, as I initially stated, relatively high risk. Many never fully repay the loan. Nearly half are delinquent at some time in the life of the loan, that's risky.

Many people think "default" means you stop paying and never start again. It's like declaring bankruptcy, where you settle your debts and are no longer required to pay on them. That's not the case with government college loans. You can never get out from under them, they can never be erased, even if you stop paying for a while, they just get worse and worse and there is no legal relief. It's not like a credit card where you can declare bankruptcy and the credit card company writes the debt off. These debts can never be written off. That's the point.
 
Many people think "default" means you stop paying and never start again. It's like declaring bankruptcy, where you settle your debts and are no longer required to pay on them. That's not the case with government college loans. You can never get out from under them, they can never be erased, even if you stop paying for a while, they just get worse and worse and there is no legal relief. It's not like a credit card where you can declare bankruptcy and the credit card company writes the debt off. These debts can never be written off. That's the point.

None of that matters. Either they are paid back on time or they are not. Those in the not category represent risk. Now, to the issue at hand. Easy money means easy signatures. That heightens not lowers risk. Easy money means higher tuition increases. Easy money means a willingness to take on more debt. All bad for students.
 
Why should student loans have lower than market rates? Could you explain that?

Because the government should not punish individuals who want to get an education. Hell why should student loans be above level the Federal Reserve offers to big banks? Warrent introduced a bill that would set them at the same level last year.
 
Because the government should not punish individuals who want to get an education. Hell why should student loans be above level the Federal Reserve offers to big banks? Warrent introduced a bill that would set them at the same level last year.

Who takes the defaults?
 
Why should student loans have lower than market rates? Could you explain that?

Why does our government give rich bankers sub market rate loans but not our students? Can you explain that?

Who takes the defaults?
As we've seen with the bankers, the American taxpayer takes the defaults.
 
Why does our government give rich bankers sub market rate loans but not our students? Can you explain that?


As we've seen with the bankers, the American taxpayer takes the defaults.

Except the bankers have an out through bankruptcy and live to swindle another day....
 
Why does our government give rich bankers sub market rate loans but not our students? Can you explain that?

As we've seen with the bankers, the American taxpayer takes the defaults.

Yes. There is good reason.

-The situation with the banks was very dangerous for the population at large and needed a very quick and decisive solution. The government did a number of things to stop the meltdown and each of these measures would need to be looked at individually. When you say "give rich bankers sub market loans" it would be necessary to be more precise, what you mean.

First of all, the owners of banks like Citi lost practically their complete stake and the government got most of its investment back if it did not actually make a gain. The low interest rates being given now, are really too low. The main beneficiary is the US government, because it pays too little on its multi-trillion Dollar debt. The banks participate in this, because the theory is that increasing rates would slow economic growth, which it very probably would. This would mean fewer jobs, so the logic goes. And it is probably true that we would have more unemployed than we have, had the rates gone up a year or two ago.

-Studying is an essentially private with positive external effects. The external effects a very important and require a mechanism by which they can be attained. Scholarships for excellent students are good. If a student wants to study, but is not good at learning can do that with his own money loaned or other. This puts a break on inefficient investment in professions that will find no employment.
If the optimum level of external effect is not reached, then the government can make that transparent and an amount of money available to study the subjects from which the effects derive. If the student does not finish successfully, he should pay back the grant.

PS: But who do you mean by "rich bankers"?
 
Yes. There is good reason.

-The situation with the banks was very dangerous for the population at large and needed a very quick and decisive solution. The government did a number of things to stop the meltdown and each of these measures would need to be looked at individually. When you say "give rich bankers sub market loans" it would be necessary to be more precise, what you mean.

First of all, the owners of banks like Citi lost practically their complete stake and the government got most of its investment back if it did not actually make a gain. The low interest rates being given now, are really too low. The main beneficiary is the US government, because it pays too little on its multi-trillion Dollar debt. The banks participate in this, because the theory is that increasing rates would slow economic growth, which it very probably would. This would mean fewer jobs, so the logic goes. And it is probably true that we would have more unemployed than we have, had the rates gone up a year or two ago.

-Studying is an essentially private with positive external effects. The external effects a very important and require a mechanism by which they can be attained. Scholarships for excellent students are good. If a student wants to study, but is not good at learning can do that with his own money loaned or other. This puts a break on inefficient investment in professions that will find no employment.
If the optimum level of external effect is not reached, then the government can make that transparent and an amount of money available to study the subjects from which the effects derive. If the student does not finish successfully, he should pay back the grant.

PS: But who do you mean by "rich bankers"?

You seem to think that the free loans for banks started and stopped a few years ago with TARP, yet it has occurred for the past 100 years and it occurs every single day. The federal reserve is not just a lender of last resort, it's become a lender for everything. "Approved" institutions can borrow from the fed at near zero interest, at which point they can loan out that free money to people like you and me for a massive markup.

The government should not be in the loan business, but as long as we are, how is lining the pockets of rich bankers with a few extra percent of profits? Having an educated society is far, far more important than having richer people looking after our money.

Rich bankers in this context I have defined as pretty much all bankers. Do you not see an issue with taxing Bob to loan to bankers for free so that they can loan the same money back to Bob for his mortage at 6%?
 
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