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Are student loan interest rates to high?

Are student loan interest rates to high?


  • Total voters
    43
You didn't seriously type that about Latin, did you?

Alright, I'm game. What is the practical application of being fluent in Latin as compared to Spanish, French, German, Italian, Japanese, Mandarin, Korean, etc.?
 
Because of the risk involved. Remember: "A student, with little to no credit history, is provided loans into the $10's of thousands, based on no income, or at the very most, the hope of future income, ..."

What risk is involved exactly? When a bank extends a loan to an individual or a business, the risk is that the individual or business with go bankrupt/default/etc. and will not be able to pay back the loan in its entirety. The bank may have to negotiate for part of its loan.

But student debt, unlike just about very other type of debt, is virtually impossible to discharge. If a student cannot pay it the parents will. Even death cannot discharge student loans—next of kin will be paying it off. There is about as much risk involved in student loans as there was in buying a serf in the Russian Empire.
 
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What risk is involved exactly? When a bank extends a loan to an individual or a business, the risk is that the individual or business with go bankrupt/default/etc. and will not be able to pay back the loan in its entirety. The bank may have to negotiate for part of its loan. But student debt, unlike just about very other type of debt, is not dischargeable. If a student cannot pay it the parents will. Even death cannot discharge student loans—next of kin will be paying it off. There is less risk involved in student loans than there was in buying a serf in the Russian Empire.

Tell me where a business, with no assets, no history, and nothing in the bank, can walk in and get $10's of thousands in loans they don't have to start paying back until years later. Never happen.

As to discharge, there are ways to get a student loan discharged, and the only way next of kin are on the hook is if they cosigned for the loan. Death ends the liability.

Student loans are high risk because nothing exists to back them but a "I promise cross my heart" pledge.

It's amazing to me that people who have done zero planning for college, can expect to receive thousands of dollars in loans, without paying a bit of a penalty for it. Don't want to pay the price? Don't go to college. Or get a couple jobs while your attending and pay for it yourself.
 
Alright, I'm game. What is the practical application of being fluent in Latin as compared to Spanish, French, German, Italian, Japanese, Mandarin, Korean, etc.?

I never mentioned Spanish, German, etc.

You don't know about the study of Latin...obviously. It's a fascinating subject you may want to Google. More than 50% of the words in the English language have Latin roots. Most of the words you find in medicine, law, diplomacy, literature, philosophy, anthropology, animal studies, and so on have Latin roots. Latin enables an English speaking person to easily learn the Romance languages because of the common roots in Latin. Most of the most common words you use every day come from the Latin. Latin is ties directly to the Roman Empire, and when the empire fell, the Latin language increased in dominance rather than becoming obsolete. Students who study Latin score far better on their SATs. I could go on an on but the rest you should learn on your own.
 
I never mentioned Spanish, German, etc.

You don't know about the study of Latin...obviously. It's a fascinating subject you may want to Google. More than 50% of the words in the English language have Latin roots. Most of the words you find in medicine, law, diplomacy, literature, philosophy, anthropology, animal studies, and so on have Latin roots. Latin enables an English speaking person to easily learn the Romance languages because of the common roots in Latin. Most of the most common words you use every day come from the Latin. Latin is ties directly to the Roman Empire, and when the empire fell, the Latin language increased in dominance rather than becoming obsolete. Students who study Latin score far better on their SATs. I could go on an on but the rest you should learn on your own.

I always wanted to take Latin in high school, but they killed the class just as I got into the school. My dad had taken it in college; much later, he went back to the community college and took it again. My understanding is that you learn so much about the English language by taking it.

I'm not in an area that offers it now; and I'm really bad at online courses. Maybe some year I'll be able to take it.
 
I always wanted to take Latin in high school, but they killed the class just as I got into the school. My dad had taken it in college; much later, he went back to the community college and took it again. My understanding is that you learn so much about the English language by taking it.

I'm not in an area that offers it now; and I'm really bad at online courses. Maybe some year I'll be able to take it.

I took it all 4 years of HS, and it helped me so much, from my SATs (aced my English but even did well on math, even though I suck at math) to the LSATs (yes, I took them) and really for the rest of my life. I even use my Latin when playing trivia. I look at a word and hope I see a Latin root in it, and then see if I can't figure out the answer.

My kids all take it. It's starting to come back to the school districts, thank goodness.
 
I never mentioned Spanish, German, etc.

You don't know about the study of Latin...obviously. It's a fascinating subject you may want to Google. More than 50% of the words in the English language have Latin roots. Most of the words you find in medicine, law, diplomacy, literature, philosophy, anthropology, animal studies, and so on have Latin roots. Latin enables an English speaking person to easily learn the Romance languages because of the common roots in Latin. Most of the most common words you use every day come from the Latin. Latin is ties directly to the Roman Empire, and when the empire fell, the Latin language increased in dominance rather than becoming obsolete. Students who study Latin score far better on their SATs. I could go on an on but the rest you should learn on your own.

Those are words. Not grammar. Not works of literature. Just words. Seems to me that simply learning some Latin words in an English class could do the trick.

Don't get me wrong, tres; you raise an interesting point here. I'm just playing devil's advocate with it.
 
Banks are borrowing money at almost zero percent interest rates. However student loan customers are being gouged at interests rates ranging from 4.7 to 7.2 percent. Why is it that are elected representatives in the government are allowing the people to be robbed in this way?

I paid 6% back in the 1980's.
 
I took it all 4 years of HS, and it helped me so much, from my SATs (aced my English but even did well on math, even though I suck at math) to the LSATs (yes, I took them) and really for the rest of my life. I even use my Latin when playing trivia. I look at a word and hope I see a Latin root in it, and then see if I can't figure out the answer.

My kids all take it. It's starting to come back to the school districts, thank goodness.

I envy you! and your kids. Glad it's coming back! It's not for everyone, of course; but it's great for those that can handle it.
 
Those are words. Not grammar. Not works of literature. Just words. Seems to me that simply learning some Latin words in an English class could do the trick.

Don't get me wrong, tres; you raise an interesting point here. I'm just playing devil's advocate with it.

Latin is a dead language. You can't converse in it. And Latin most certainly does impact grammar. The distinction in English between words like I and me come directly from the Latin cases for words.
 
I never mentioned Spanish, German, etc.

You don't know about the study of Latin...obviously. It's a fascinating subject you may want to Google. More than 50% of the words in the English language have Latin roots. Most of the words you find in medicine, law, diplomacy, literature, philosophy, anthropology, animal studies, and so on have Latin roots. Latin enables an English speaking person to easily learn the Romance languages because of the common roots in Latin. Most of the most common words you use every day come from the Latin. Latin is ties directly to the Roman Empire, and when the empire fell, the Latin language increased in dominance rather than becoming obsolete. Students who study Latin score far better on their SATs. I could go on an on but the rest you should learn on your own.

You could also just learn a Romance language and it would probably be far more useful. You do not need to know Latin to use Latin words.
 
You could also just learn a Romance language and it would probably be far more useful. You do not need to know Latin to use Latin words.

Yes, that relates to what I posted, because we all know how many Romance words are at the root of law, and medicine, and so on.
 
You could also just learn a Romance language and it would probably be far more useful. You do not need to know Latin to use Latin words.

I had very good grammar growing up because my dad was an English major so we grew up knowing how to speak properly (can't say I've retained it all...) But it was my Spanish class that taught me what the parts of speech were called and WHY things were in a certain order. I'm sure Latin would have done even more of that.

Learning any language helps us with our main language (in my opinion). But latin would be great because it's the root of so many languages.

But I apologize -I've gone way off-topic.
 
Latin is a dead language. You can't converse in it. And Latin most certainly does impact grammar. The distinction in English between words like I and me come directly from the Latin cases for words.

Maybe. But many cases and grammatical rules have changed since then. For instance, dative vs. accusative isn't a thing in the English language; we just have objective and subjective forms.
 
Banks are borrowing money at almost zero percent interest rates. However student loan customers are being gouged at interests rates ranging from 4.7 to 7.2 percent. Why is it that are elected representatives in the government are allowing the people to be robbed in this way?

My federal student loan: 6.8%
My car loan: 6.2%

Department of Education is profiting in the hundred of billions from the last 6 years or so. Yes, student loan interest rates are too high.
 
My federal student loan: 6.8%
My car loan: 6.2%

Department of Education is profiting in the hundred of billions from the last 6 years or so. Yes, student loan interest rates are too high.

Your student loan:unsecured
Your car loan:secured

That car loan rate is high. Why don't you refinance it?
 
How so?




My car is used, not new.

Um, you don't know the difference between a secured loan and an unsecured loan?

A secured loan contains collateral which the lender has a lien on while the loan is outstanding. If you default on your car loan, as much as they don't want to, they can and will seize your car which will enable them to recoup some of the loan. They can't repossess your college courses.

The average used car loan rate for a 36 month loan in this country is 5.15% as of last week.
 
Student loans are among the most risky loans to be had.

You have a borrower with no credit history. You have no collateral. You have an outstanding debt without payment for years. And if you knew anything about banking (it does not appear that you do), carrying a balance on their books for decades is not what they're supposed to do for many reasons.

Most banks aren't in the student loan business anymore and most of them are damn glad they aren't.

Banks don't sit on them, they sell them to companies like Nelnet, who use them as colateral.
 
Banks don't sit on them, they sell them to companies like Nelnet, who use them as colateral.

Nelnet is a loan servicing company. There are something like 15 of them which were granted contracts by the government to service student loans. And? Banks have been selling loans to servicers for years. When you retain servicing, your capital is tied up in that loan.
 
Using that argument, the interest rates can be zero or even negative for any and all loans and we are still left with the problem of what, if anything, is a better investment than some other thing (budgeting). While an engineering degree from a major college may be a good risk (investment?) that is not to say that a cosmetology degree form some fly by night online diploma mill is an equally good risk (investment?).

Even if you are firmly in the public debt does not really matter camp, it still makes sense to borrow and spend (invest?) wisely rather than to pretend that all government spending is equally beneficial. If everyone in the US was suddenly able to go to college would we really be better off or simply have better educated burger flippers, grass mowers, bed makers and bean pickers? If anyone could be a doctor, lawyer or Indian chief would those jobs still command an upper middle class salary?

Well that might be so, and although it is a concern, it is a rather involved topic that deserves separate discussion.
 
Because of the risk involved. Remember: "A student, with little to no credit history, is provided loans into the $10's of thousands, based on no income, or at the very most, the hope of future income, ..."

The problem with your response is that you appear to confuse the purpose of private commercial lending institutions and federal student loans. The purpose of the former is to make a profit, while the purpose of the latter is to facilitate education. As such, the level of risk is somewhat, though not entirely irrelevant to the interest rate.
 
Personally, I think that the issue isn't so much interest rates, as it is how insanely high the total cost of education can be.

I mean...anywhere from 50 thousand to several hundred thousand dollars, in some cases probably more, depending on how much education you get.
At that level, and given the current job market and available income for someone starting out (in most cases), there's just no possible way anyone (especially students without parental help for some/all educational costs) is going to pay off their education costs in a short amount of time.
Years, perhaps multiple decades, are required, in many cases, to pay off such loans...

So, IMO we need to either cut education costs, reduce interest rates on loans, increase tuition grants...or preferably all of the above. Maybe something else I haven't thought of.


Basically the problem at this point is that higher education costs prevent those of us who are less well-off from accessing it.
How many people out there might be capable of something, yet cannot due to monetary reasons. Sure, some few get through on scholarships and the like, but the requirements and availability of that route limits it to only the very best.
 
The problem with your response is that you appear to confuse the purpose of private commercial lending institutions and federal student loans. The purpose of the former is to make a profit, while the purpose of the latter is to facilitate education. As such, the level of risk is somewhat, though not entirely irrelevant to the interest rate.

That is absolute nonsense. The level of risk is important to ANY loan's interest rate - non-payment of government loans amounts to stealing public funds. Do you really intend them to be gifts?

The affect of lowering the interest rate (which lowers the monthly payment and thus the real cost of the loan) simply enables the seller (in this case, colleges) to raise the price of the good/service financed (tuition, room and board) with no apparent cost change to the consumer. Perhaps that helps to explain why the cost of college far outpaces general inflation.

That "easy credit" and "flexible repayment terms" is largely what caused the housing market crash - if J. Q. Public can buy X on credit (federally insured at that) then they care only what the initial monthly payment is and not what X actually costs. If that payment is not due for 4 to 6 years (longer than they have been an adult) than they may not really care at all.
 
That is absolute nonsense. The level of risk is important to ANY loan's interest rate - non-payment of government loans amounts to stealing public funds. Do you really intend them to be gifts?

I disagree with you in the strongest terms. No one is saying it should be a gift. One the other hand the government should not be gouging customers either. For example, a parent could borrow $100,000 to buy a house at 3 or 4 percent interest. However, if he wanted to borrow money for his kid to attend medical school he might have to pay 8.5 percent, regardless of his credit. It is ridiculous. It is especially ridiculous when the government is paying at the most 2.5 interest for a 30 year loan. The problem with your assertion is that it ignores the purpose of the loans. It's to facilitate education, not to make a profit.
 
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