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Are student loan interest rates to high?

Are student loan interest rates to high?


  • Total voters
    43
Income is also one of the most important issues, it's been my experience that borrowers have to be able to prove that they can (currently) handle the payments, and banks don't go for speculative income. That's why I don't understand how anyone can manage to get a student loan from a bank without there being some sort of guarantor.


usually they dont, unless they have assets to back the debt

the government gives out the initial loans.....

but that doesnt mean you have to keep those original loans once you have a job and can refinance them at better terms
 
Because you can. You can take a loan against your home. You can take a loan against your 401K. You can pledge life insurance or CDs or other things for collateral. You can take a credit line. You can take an installment loan. And anyone with good credit can get a loan cheaper than 13%. You have to find the lender that will give it to you. Most community banks and credit unions can and will make a personal unsecured loan for as much as $50,000. You have to ask what their credit requirements are for every loan type they make, and every loan dollar amount they make. As I told you at the beginning.

The problem with what you are saying is that it is not practical for most people, especially someone at the beginning of their career to get a unsecured loan, to put up home equity are collateral, or have enough money in a 401k to be able to borrow $27,000. You say because you can, but not many people will be able to do that, practically speaking.

You have to do your own research on things, and you can not make a blanket statement that it isn't a "practical option for most borrowers. You are not privy to the financial status nor the credit rating of most borrowers.

According to THIS SOURCE, here's how average credit scores break down by age.

credit-score-by-age.png

If that is any indication, it would not be practical to expect that a young borrower would be able to get an unsecured loan, as you suggested in an earlier post. Therefore the government should allow student loan consumers to refinance their debt.
 
The problem with what you are saying is that it is not practical for most people, especially someone at the beginning of their career to get a unsecured loan, to put up home equity are collateral, or have enough money in a 401k to be able to borrow $27,000. You say because you can, but not many people will be able to do that, practically speaking.



According to THIS SOURCE, here's how average credit scores break down by age.

View attachment 67182402

If that is any indication, it would not be practical to expect that a young borrower would be able to get an unsecured loan, as you suggested in an earlier post. Therefore the government should allow student loan consumers to refinance their debt.

Do you ever read and pay attention to posts? The poster was talking about his wife's student loans, not some "young borrower" or "young people".
 
Income is also one of the most important issues, it's been my experience that borrowers have to be able to prove that they can (currently) handle the payments, and banks don't go for speculative income. That's why I don't understand how anyone can manage to get a student loan from a bank without there being some sort of guarantor. Few full time students are going to have a significant income and the prospect of a potential future degree in no way indicates that the student will ever have a decent income.

Banks can't go for speculative income. Their regulators won't allow them to anymore.

Student loans are great things. It's the only time a borrower with no income and no credit history can get unsecured credit.
 
Banks can't go for speculative income. Their regulators won't allow them to anymore.

Student loans are great things. It's the only time a borrower with no income and no credit history can get unsecured credit.

Which is the reason I support the federal student loan program. Without it, we would either have an under-educated workforce, or we would have to subsidize individuals education even more. I find a reasonable student loan program to be preferable to freebies or to having an inadequately educated workforce.
 
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Which is the reason I support the federal student loan program. Without it, we would either have an under-educated workforce, or we would have to subsidize individuals education either more. I find a reasonable student loan program to be preferable to freebies or to having an inadequately educated workforce.

Well said - couldn't agree more.
 
I was one of the lucky ones who was locked in with an interest rate of 2.875%. One of the ladies in the Financial Aid office was jealous because she graduated a few years earlier and had a 7% interest rate.
 
Are student loan interest rates too high?

Why don't we just skip all the preamble and just cut to the inevitable:

'In other headlines, Obama announced that all colleges/universities are tuition free as the government will foot all post-secondary education costs for American students.'

One year later:

'In further news, an independent study found that college tuitions rocketed upwards by 27% over the past 12 months'.
 
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