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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
Redress said:
Well, no. While taxing is one way that the government brings in revenue, it is not the only way. A student loan is not a tax. Tax means something other than interest from a loan.
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Sorry yes. When the government takes money directly from citizens to fund the services it provides to such it is called a tax. If the government is profiting from the excessive interest rates that it charges for the loans, such can be viewed as a tax as that money is directly coming from income from citizens. Although there is a difference in the mechanism in which the funds are extracted, the principle of taking money to fund government operations is the same.
 
MildSteel said:
I was talking to one of my daughters today. She was saying that it is ridiculous that the interest rate on her car loan is only 3 percent while the interest rate on her student loan is more than double that. Such gouging is no more than a tax that is being imposed on the middle class. It is especially disgusting at a time when Republicans are proposing tax cuts that will benefit the wealthy.
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I've said the same to my parents. It makes no sense for the interest rate to be higher than that for a car loan. And if that gets you angry, check this out: Obama Student Loan Policy Reaping $51 Billion Profit

Bottom line is interest rate should be high enough to cover upkeep and nothing more. Government is not a corporation. It should not act like one.
 
Redress said:
If I was to make a list of the top 1000 issues facing the middle class today, student loan rates would not even make the list.
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I would like to see that list.
 
cpwill said:
True enough. The average person can still get through college, they just have to work at it (maybe that's the problem?)

Which doesn't mean that the federal government should be making it harder by jacking up college costs.



What percentage of student loans are non-performing? Seems a rather relevant figure to the OP.
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College costs are an issue, and one that should be looked at in detail. Student loans themselves, not so much. They are provided to help people pay for college, they are not intended as a go to college free card.
 
Redress said:
It is a situation those young people can control. Don't want to pay for a student loan, do not get one. There are in fact other options. Complaining you have to pay for a service is kinda sad.
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Again your post demonstrates the type of elitist callousness that is sadly apart of the liberal establishment today. You have this Alan Dershowitz, Jeffery Epstein crowd who really don't have an interest in egalitarian liberal economic principles, but rather their interest is in providing for their personal security in terms of protecting their ethnic interests, financial interests, and providing cover for their personal behavior. As such they adopt the mantle of liberalism, but in reality, they have very little compassion in their heart for the suffering of others. That type of deception is truly what is sad.

That said, actually the young people of today have very little control over the job market in terms of the types of jobs that will pay a living wage that are available, the interest rates that they will have to pay for funds in order to get the type of education it takes to get such employment, and the rather high tuition rates that are a result of the systemic problems associated with, but not excluded to, fractional reserve banking. Therefore what you have put forward makes little practical sense.
 
MildSteel said:
Sorry yes. When the government takes money directly from citizens to fund the services it provides to such it is called a tax. If the government is profiting from the excessive interest rates that it charges for the loans, such can be viewed as a tax as that money is directly coming from income from citizens. Although there is a difference in the mechanism in which the funds are extracted, the principle of taking money to fund government operations is the same.
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Or it could be a fee. If I pay admission to a state park, I have not paid a tax, I have paid a fee.
 
Redress said:
College costs are an issue, and one that should be looked at in detail. Student loans themselves, not so much. They are provided to help people pay for college, they are not intended as a go to college free card.
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The problem being, when government is your provider, that is how they are used. Student loans are one of the major drivers of college costs because they make consumers insensitive to price increases.
 
MildSteel said:
Again your post demonstrates the type of elitist callousness that is sadly apart of the liberal establishment today. You have this Alan Dershowitz, Jeffery Epstein crowd who really don't have an interest in egalitarian liberal economic principles, but rather their interest is in providing for their personal security in terms of protecting their ethnic interests, financial interests, and providing cover for their personal behavior. As such they adopt the mantle of liberalism, but in reality, they have very little compassion in their heart for the suffering of others. That type of deception is truly what is sad.

That said, actually the young people of today have very little control over the job market in terms of the types of jobs that will pay a living wage that are available, the interest rates that they will have to pay for funds in order to get the type of education it takes to get such employment, and the rather high tuition rates that are a result of the systemic problems associated with, but not excluded to, fractional reserve banking. Therefore what you have put forward makes little practical sense.
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OK, this might confuse you, but I am not Alan Dershowits, nor Jeffery Epstein, nor am I any other liberal, and I am about as far from elite as it is possible to get. Bringing in other people to try and associate me with is pretty lame and a failure as arguments go.

Young people today do have control over what kind of scholarships they get, whether they work while attending school, whether they have access to the GI Bill, and so on and so forth. Student loans are far from the only way to attend college.
 
MildSteel said:
Sorry yes. When the government takes money directly from citizens to fund the services it provides to such it is called a tax. If the government is profiting from the excessive interest rates that it charges for the loans, such can be viewed as a tax as that money is directly coming from income from citizens. Although there is a difference in the mechanism in which the funds are extracted, the principle of taking money to fund government operations is the same.
Click to expand...

It is not a tax for the simple reason that you are not forced to pay it. You do not have to take a student loan.
 
MildSteel said:
Again your post demonstrates the type of elitist callousness that is sadly apart of the liberal establishment today. You have this Alan Dershowitz, Jeffery Epstein crowd who really don't have an interest in egalitarian liberal economic principles, but rather their interest is in providing for their personal security in terms of protecting their ethnic interests, financial interests, and providing cover for their personal behavior. As such they adopt the mantle of liberalism, but in reality, they have very little compassion in their heart for the suffering of others. That type of deception is truly what is sad.

That said, actually the young people of today have very little control over the job market in terms of the types of jobs that will pay a living wage that are available, the interest rates that they will have to pay for funds in order to get the type of education it takes to get such employment, and the rather high tuition rates that are a result of the systemic problems associated with, but not excluded to, fractional reserve banking. Therefore what you have put forward makes little practical sense.
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look in any newspaper

jobs always available

nurses
engineers
accountants

here is an article on 12 common jobs that pay well after college

12 Entry-Level Jobs with Big Earning Potential - Salary.com

there are countless articles listing things every year

certain degrees will always be in vogue

and some degrees arent worth the paper they are printed on

the idea is to have some idea on what you want to do....what you may have an affinity for.....and then go for it

when i was going to school in 1979, journalism which was my first major was a brutal field to break into

i changed my majors, and my career path to business/accounting because i wanted to make sure i could get a job

chase a dream, or chase a dollar.....choices
 
Geoist said:
I've said the same to my parents. It makes no sense for the interest rate to be higher than that for a car loan. And if that gets you angry, check this out: Obama Student Loan Policy Reaping $51 Billion Profit

Bottom line is interest rate should be high enough to cover upkeep and nothing more. Government is not a corporation. It should not act like one.
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Government is also not a lender. But they act like one. And everyone is surprised.

You want government in the lending business? Then they will act like a lender.
 
Learn to speak Spanish, give a common name and go to school for free as an undocumented student. Problem solved. OR... don't sign for a student loan. It is clearly obvious to anyone paying attention that colleges are a for profit business and that the goal is not to deliver an education but to get that student loan sold. It is a revenue stream for somebody else. If you fell for it, you got your education. The only way to win that game is not to play.
 
Gaius46 said:
Saying the interest rate's too high and calling it a tax are two different things. The rate may well be too high but it is not, by any reasonable definition of the term a "tax". For one thing taxes are compulsory, you are not obligated to take a government backed student loan.
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Not all taxes are compulsory in the sense that you mean. For example one does not have to pay property tax if he does not buy property.
 
Geoist said:
I've said the same to my parents. It makes no sense for the interest rate to be higher than that for a car loan. And if that gets you angry, check this out: Obama Student Loan Policy Reaping $51 Billion Profit

Bottom line is interest rate should be high enough to cover upkeep and nothing more. Government is not a corporation. It should not act like one.
Click to expand...

Exactly. It is totally ridiculous for borrowers, especially young people like my daughter who are just graduating from college to be gouged in this way.
 
Redress said:
Or it could be a fee. If I pay admission to a state park, I have not paid a tax, I have paid a fee.
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That fee is the functional equivalent of a tax and as such can be viewed in those terms.
 
MildSteel said:
Not all taxes are compulsory in the sense that you mean. For example one does not have to pay property tax if he does not buy property.
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Almost everyone pays property taxes, one way or another. If you rent,
part of your rent pays the property taxes.
The only exception might be a boat, but even a boat pays license renewal.
 
MildSteel said:
Exactly. It is totally ridiculous for borrowers, especially young people like my daughter who are just graduating from college to be gouged in this way.
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I paid for both my kids to go to college, I still think it was a good investment.
If you consider the offset from minimum wage, the payback time for the cost of college
compared to the extra income from having a degree, could be under a year, to several years.
Considered over a lifetime of employment, it is a very good deal.
Part of this hinges of if the degree obtained is marketable.
 
Redress said:
OK, this might confuse you, but I am not Alan Dershowits, nor Jeffery Epstein, nor am I any other liberal, and I am about as far from elite as it is possible to get.
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Well this may disappoint you, but it is quite obvious that you are not Dershowitz because this would be a much more challenging discussion. Dershowitz would not make the statement "nor am I any other liberal" while having the label "Very Liberal" emblazoned on his account. Rather it is a frame of mind that is the point.

Redress said:
Bringing in other people to try and associate me with is pretty lame and a failure as arguments go.
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The point is not that you are Dershowitz, Epstein, or necessarily part of the liberal elite. Rather the point is that your posts represent a frame of mind that demonstrates your interests intersect their's in one or more of the areas that I described. Your interest in liberal values, if your label is to be believed, is certainly not founded on compassion for others. Rather it is based on narrow selfish interests which is demonstrated by your lack of concern for the type of challenges that young student borrowers face today.

Redress said:
Young people today do have control over what kind of scholarships they get, whether they work while attending school, whether they have access to the GI Bill, and so on and so forth. Student loans are far from the only way to attend college.
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No they don't have much control over the kinds of scholarships they get because that is determined by other people. Over and above that, even when they get scholarships, the costs of education are so steep these days that the scholarships frequently are not sufficient. My daughter got scholarships, but they were not enough to cover her costs. Although student loans are not the only way to attend college, they are a practical means to obtain the type of education that is necessary these days to get employment that pays a living wage. As such, the government should not gouge borrowers with interests rates that are excessive. The fact that someone like my daughter could finance a car a 3 percent interest but pays more than double that interest on a student loan from the government is quite frankly disgusting.
 
longview said:
I paid for both my kids to go to college, I still think it was a good investment.
If you consider the offset from minimum wage, the payback time for the cost of college
compared to the extra income from having a degree, could be under a year, to several years.
Considered over a lifetime of employment, it is a very good deal.
Part of this hinges of if the degree obtained is marketable.
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The interest rates are unnecessarily high. It should not be a profit making scheme for the government, especially at a time when Republicans are proposing tax cuts that benefit primarily wealthy people.
 
Gaius46 said:
It is not a tax for the simple reason that you are not forced to pay it. You do not have to take a student loan.
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Again, your reasoning in flawed. You don't have to pay sales tax if you don't buy anything that is taxable.
 
MildSteel said:
Exactly. It is totally ridiculous for borrowers, especially young people like my daughter who are just graduating from college to be gouged in this way.
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....then they should have gotten scholarships, worked their way through school, gone to local college, joined the military, etc?


I'm halfway through my second masters' degree. Thus far: Zero Debt Incurred. My parents paid for three semesters of undergrad.
 
cpwill said:
....then they should have gotten scholarships, worked their way through school, gone to local college, joined the military, etc?
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My daughter got scholarships. Tuition, room and board, and other costs are so high, that student loans are a practical option.

cpwill said:
I'm halfway through my second masters' degree. Thus far: Zero Debt Incurred. My parents paid for three semesters of undergrad.
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Good for you.
 
MildSteel said:
The interest rates are unnecessarily high. It should not be a profit making scheme for the government, especially at a time when Republicans are proposing tax cuts that benefit primarily wealthy people.
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The interest rates are not high if you compare what it would cost to put her tuition on a credit card.
Are the rates higher than under the old system? yes, Blame Obama!
Are the rates high in relationship to the risk, not so much.
If your Daughter went to the bank and asked for an unsecured loan, if they would give it to her,
the rate would likely be over 20%.
 
longview said:
The interest rates are not high if you compare what it would cost to put her tuition on a credit card.
Are the rates higher than under the old system? yes, Blame Obama!
Are the rates high in relationship to the risk, not so much.
If your Daughter went to the bank and asked for an unsecured loan, if they would give it to her,
the rate would likely be over 20%.
Click to expand...

At a time when the government, through its empowered representative the Federal Reserve, has taken trillions of dollars in toxic debt from banks, there should be no gouging student loan customers in the form of excessive interest rates. Not only that, the government has the powerful mechanism of wage garnishment to recover funds from accounts that are in default. As such student loan customers should not be charged these excessive rates.
 
MildSteel said:
My daughter got scholarships. Tuition, room and board, and other costs are so high, that student loans are a practical option.
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I am not sure the student loans were a practical option, if she is going to complain about it when she is finished.
She borrowed the money knowing the rate.
Maybe she should have borrowed it from you!
Maybe she should have lived at home while in school(if possible).
There are a lot of options, for getting a degree.
 
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