• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Are student loan interest rates to high?

Are student loan interest rates to high?


  • Total voters
    43
Well ocean, gouging is taking advantage of people with a need to charge them more than necessary. It is disgusting that a parent who wants to borrow $100,000 for medical school for his kid is forced to pay 8.5 percent interest when the government is paying 2.5 percent interest on a 30 year loan. That is a hell of a spread. That is gouging.

I agree. Private companies are different; they are there for profit. The govt. shouldn't try to make big profits on services they provide. They should charge an interest rate that covers their costs, including the costs of default. So maybe a couple percentage points above their cost of funds; not 6 points.
 
Um, you don't know the difference between a secured loan and an unsecured loan?

I am familiar with the concept; just unfamiliar with the terms.

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.

You cannot get rid of student loan debt through bankruptcy and you cannot refinance it. And I don't really see how it is such a "risky" loan when the Department of Education's "profits" $40 billion a year off student loans. Either return that excess money to the former students or lower their interest rates.
 
I agree. Private companies are different; they are there for profit. The govt. shouldn't try to make big profits on services they provide. They should charge an interest rate that covers their costs, including the costs of default. So maybe a couple percentage points above their cost of funds; not 6 points.

Agreed 100%. Interest rate should be enough to cover upkeep.
 
Yea, I did it pushing a mower, gardening etc. It really just depends on how hard you are willing to work. Not to say that there isn't a place for loans, I just don't think (actually I know for certain) that it's optional. Therefore you pay the going rate and appreciate the opportunity it affords you.

BTW. There is no doubt that "easy money" in the system is what allows tuitions to grow faster than inflation, consistently and by a large margin. If rates were even lower, tuitions would grow even faster. The universities will suck every dime they can out of each student, and the students will passively allow it because they have been conditioned to believe that debt is the norm. Bad bad bad.

i got my degree while i was active duty

was it easy? hell no

but 75% of tuition was paid up to E4, and 90% once i hit E5

it took me 6 years.....three duty stations, and credits from over a dozen different places

my entire undergrad degree cost me less than 4k.....again a few years back

it is a way other than going 100k in debt to obtain an education
 
I am familiar with the concept; just unfamiliar with the terms.



You cannot get rid of student loan debt through bankruptcy and you cannot refinance it. And I don't really see how it is such a "risky" loan when the Department of Education's "profits" $40 billion a year off student loans. Either return that excess money to the former students or lower their interest rates.


there is no government program to refinance student loans, but there are banks and credit unions that have consolidated them, and given lower rates

a good job, good credit, and a good plan to repay helps makes it happen
 
a good job, good credit, and a good plan to repay helps makes it happen

A lower interest rate also helps in repaying them.

While I do not know what your political lean is, it is interesting how so many conservatives are defending the idea of more citizen dollars going to bloated government...
 
Well ocean, gouging is taking advantage of people with a need to charge them more than necessary. It is disgusting that a parent who wants to borrow $100,000 for medical school for his kid is forced to pay 8.5 percent interest when the government is paying 2.5 percent interest on a 30 year loan. That is a hell of a spread. That is gouging.

As I wrote, we have different opinions on what "gouging" is.
 
I am familiar with the concept; just unfamiliar with the terms.



You cannot get rid of student loan debt through bankruptcy and you cannot refinance it. And I don't really see how it is such a "risky" loan when the Department of Education's "profits" $40 billion a year off student loans. Either return that excess money to the former students or lower their interest rates.

Incorrect. You most certainly can refinance your student loans.

And why should you be able to "get rid" of them through bankruptcy anyway? Why should you be able to walk away from any financial contract through bankruptcy? You borrowed the money - pay it back. Student loans can be deferred.
 
Incorrect. You most certainly can refinance your student loans.

And why should you be able to "get rid" of them through bankruptcy anyway? Why should you be able to walk away from any financial contract through bankruptcy? You borrowed the money - pay it back. Student loans can be deferred.

Companies can get rid of their debts through bankruptcy. Why not the rest of us? When a company makes a financial contract with us, they know it's a risk they take.
 
Incorrect. You most certainly can refinance your student loans.

I am talking about through government. Refinancing through a private institution may help lower interest rates but usually means higher monthly rates.

And why should you be able to "get rid" of them through bankruptcy anyway? Why should you be able to walk away from any financial contract through bankruptcy? You borrowed the money - pay it back.

There are serious consequences to bankruptcy. But that is not the issue. Point is, you pretty much cannot get out of paying it back so there is very low risk to giving such loans.

Student loans can be deferred.

So?



But I can see you would prefer to give the money to a growing central government over giving it back to the citizens. Btw, glad to see you changed your lean from 'libertarian' to 'moderate.' More accurate. ;)
 
Companies can get rid of their debts through bankruptcy. Why not the rest of us? When a company makes a financial contract with us, they know it's a risk they take.

Companies shouldn't have their financial obligations eliminated either. I've said that repeatedly.

Bankruptcy should not be easy - and it shouldn't be viewed through the lens of "it's the lender's risk". No, it's your obligation. Their risk isn't your concern if you borrow the money.

Everyone else pays for your bankruptcy.
 
I am talking about through government. Refinancing through a private institution may help lower interest rates but usually means higher monthly rates.



There are serious consequences to bankruptcy. But that is not the issue. Point is, you pretty much cannot get out of paying it back so there is very low risk to giving such loans.



So?



But I can see you would prefer to give the money to a growing central government over giving it back to the citizens. Btw, glad to see you changed your lean from 'libertarian' to 'moderate.' More accurate. ;)

May help lower interest rates but it usually means higher monthly rates? Wut?

These loans are the doing of the federal government. And I have no idea where you got the idea that I want anyone to give money to the government. I don't support government subsidy and welfare programs (like this one).

Yes, I'm not claiming Libertarian as long as there are left Lbertarians cheering government taking my hard earned money and tossing it own the window- like these student loan programs. Libertarianism to me doesn't mean whining because you're getting cheap money from other taxpayers and it isn't cheap enough for your liking.
 
Well ocean, gouging is taking advantage of people with a need to charge them more than necessary. It is disgusting that a parent who wants to borrow $100,000 for medical school for his kid is forced to pay 8.5 percent interest when the government is paying 2.5 percent interest on a 30 year loan. That is a hell of a spread. That is gouging.

I thought I would check on the current interest rates reported for student loans. This is what I found.

https://studentaid.ed.gov/about/announcements/interest-rate

loans.jpg

These rates appear to be different from the 8.5% rate you've posted. Why is the rate you're showing higher than what I see in the table?
 
I thought I would check on the current interest rates reported for student loans. This is what I found.

https://studentaid.ed.gov/about/announcements/interest-rate

View attachment 67182350

These rates appear to be different from the 8.5% rate you've posted. Why is the rate you're showing higher than what I see in the table?

Those rates are going to be killer if inflation ever results in the 18% interest rates we had once upon a time not so long ago. Then these people will be thanking doG that they have a loan with a 4.66% interest rate while their bank is paying them 15% on a 36 month CD.
 
Elizabeth Warren, the great hero of the left who has people convinced that student loan interest rates are a problem, earned $430,000 from Harvard in 2011 alone, teaching attorneys how to make it easy to file bankruptcies which result in more charged off balances that get passed on to the rest of us.

In 2011 Harvard president Drew Faust earned $874,559 in salary and benefits.

I wouldn't worry about the "staff, rank and file" at Harvard.

Not at Harvard, no.

But the rest of the state funded schools? What's the average for a part time prof at a 4 year college? 20 bucks an hour, maybe 30? Vs 600 an hour for the person who does the least...
 
Not at Harvard, no.

But the rest of the state funded schools? What's the average for a part time prof at a 4 year college? 20 bucks an hour, maybe 30? Vs 600 an hour for the person who does the least...

I have no idea what part time professors get. What should a part time employee get paid versus a CEO?

The presidents of universities do less than part time professors? Not when I was in college. Not in any of the colleges my friends, family, or anyone else I know went to.
 
So let's see. 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, and you consider 4.5% to 7.2% gouging?

It's difficult to know where to go with that.

It's not gouging, but the government makes a profit off of student loans and almost every one eventually repays their loans in full with interest so there is really little risk factor to the government.

I find that the student loan program is a reasonable compromise, between the federal tax payer having to subsidize individuals college or having a nation without ample college graduates - but there is no reason that the government has to run the program at a profit, and no reason that student loans can't be made at the same rates that banks can borrow money at.
 
It's not gouging, but the government makes a profit off of student loans and almost every one eventually repays their loans in full with interest so there is really little risk factor to the government.

I find that the student loan program is a reasonable compromise, between the federal tax payer having to subsidize individuals college or having a nation without ample college graduates - but there is no reason that the government has to run the program at a profit, and no reason that student loans can't be made at the same rates that banks can borrow money at.

So how do you suggest those loans be written then? Treat the students the same as banks, and make the loans at whatever rate the banks pay, and not lock them in?
 
May help lower interest rates but it usually means higher monthly rates? Wut?

You care to prove me wrong?

I have no idea where you got the idea that I want anyone to give money to the government.

That is exactly what you support by defending the high interest rates.


Yes, I'm not claiming Libertarian as long as there are left Lbertarians cheering government taking my hard earned money and tossing it own the window- like these student loan programs. Libertarianism to me doesn't mean whining because you're getting cheap money from other taxpayers and it isn't cheap enough for your liking.

Your reading comprehension is lacking. I am not cheering student loan programs. I am criticizing the high interest rate that allows the DoE to take in tens of billions of dollars from struggling young citizens. That is a perfectly libertarian position.
 
So how do you suggest those loans be written then? Treat the students the same as banks, and make the loans at whatever rate the banks pay, and not lock them in?

That seems reasonable to me.
 
Those rates are going to be killer if inflation ever results in the 18% interest rates we had once upon a time not so long ago. Then these people will be thanking doG that they have a loan with a 4.66% interest rate while their bank is paying them 15% on a 36 month CD.

Absolutly.

But I doubt that we will ever see the 18% prime rate again. Interest rates are a function of inflation and tend to follow inflation closely. The high inflation rates that we were experiencing during the late 70s and early 80s were the result of cost push inflation due to OPEC embargos which resulted in oil going from $12 to $80 in less than five years.
 
Companies shouldn't have their financial obligations eliminated either. I've said that repeatedly.

Bankruptcy should not be easy - and it shouldn't be viewed through the lens of "it's the lender's risk". No, it's your obligation. Their risk isn't your concern if you borrow the money.

Everyone else pays for your bankruptcy.


Which is why one of my credit cards has an interest rate of 28% (I make sure never to leave a balance on that card)

Yes, when you enter into a contract, the lender knows you might default; that's why they peg the interest where they do. No right to bankruptcy? signing a contract doesn't make you an indentured servant - unless it's a student loan.

But that's really off topic from here. sorry.
 
And I don't really see how it is such a "risky" loan when the Department of Education's "profits" $40 billion a year off student loans. Either return that excess money to the former students or lower their interest rates.

Excellent post! Excellent!

I knew they were gouging people. There you go. The interests rates are too damn high.

Great post!!!! Thank you very, very much for that insight!
 
It's not gouging, but the government makes a profit off of student loans and almost every one eventually repays their loans in full with interest so there is really little risk factor to the government.

I find that the student loan program is a reasonable compromise, between the federal tax payer having to subsidize individuals college or having a nation without ample college graduates - but there is no reason that the government has to run the program at a profit, and no reason that student loans can't be made at the same rates that banks can borrow money at.

and when banks ran the program, THEY made the money, but the govt assumed the risk. Much better to have the students borrow directly from the govt, so that any profits do go to financing more student loans. But I agree the profits should be minimal.
 
Back
Top Bottom