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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?


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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.

:shrug: I would disagree - you don't have to go to debt to get through college. Med School or Law School, maybe, but undergrad? Nope. There are a bunch of ways to increase your money inflow while also decreasing your outgo around college. Do community college for two years, for one example, prior to taking those classes to an in-state public university and graduate under their name, but at a significantly reduced cost.

The Bible says nothing positive about taking on debt, and quite a bit against it. If I can recommend a guy who spends a lot of time teaching biblical principles as they relate to money.

Good for you.

Well, in order to do so, I joined the military. Which, on top of my education, set me up for a career. I was willing to sacrifice to get what I wanted.


:( I'm sorry your daughter feels stuck and overwhelmed. It's the first major hurdle for my generation and the ones slightly after us, and it does suck (like starting life with a third of a mortgage, but no house). But she isn't anywhere that she didn't put herself.
 
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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.
I don't like what the government did to the student loan program ether, but your daughter
accepted the loans knowing the rate.
 
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.

The thing is this, the government took over $15,000 from my paycheck last year in the form of income tax. As such, I have the right to say that I think that the interest rates that they are charging on student loans are excessive. They are. The spread between the rates that they pay to borrow money and what they charge student loan customers is ridiculous. The purpose of the loans is not to tax student loan customers for the sake of profit with these rates. It is to facilitate education.
 
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.

did they use a rubber hose

was she water boarded

did she have a gun to her head when she signed the paperwork

omg....she took out a loan.....now she has to pay it back

if she doesnt like the terms, have gher refinance it

6% interest is not gouging.....historically it is a very nominal rate

you want gouging...look back at mortgage and car rates in 1981-82

i paid 15% with freaking perfect credit on a car note

why dont you just payoff the note for her, and have her pay you back?

or why cant she refinance?
 
:shrug: I would disagree - you don't have to go to debt to get through college. Med School or Law School, maybe, but undergrad? Nope. There are a bunch of ways to increase your money inflow while also decreasing your outgo around college. Do community college for two years, for one example, prior to taking those classes to an in-state public university and graduate under their name, but at a significantly reduced cost.

The Bible says nothing positive about taking on debt, and quite a bit against it. If I can recommend a guy who spends a lot of time teaching biblical principles as they relate to money.



Well, in order to do so, I joined the military. Which, on top of my education, set me up for a career. I was willing to sacrifice to get what I wanted.
Both of my kids, lived at home and did 2+2 degrees, it saved me about $12 K each.
 
:shrug: I would disagree - you don't have to go to debt to get through college.

Well it is a practical way to cover such costs. I paid for her first two years of school and paid the room and board for the third. What they charge for tuition now is more that ten times what I paid when I was in school. It is ridiculous.

The Bible says nothing positive about taking on debt, and quite a bit against it. If I can recommend a guy who spends a lot of time teaching biblical principles as they relate to money.

We don't have a society that is structured on Biblical principles. If we did, we would not do things like bomb innocent people to usurp the resources of their country.

Well, in order to do so, I joined the military. Which, on top of my education, set me up for a career. I was willing to sacrifice to get what I wanted.

Times have changed. Like I said, tuition costs are more than ten times what it cost me when I was in school.
 
I don't like what the government did to the student loan program ether, but your daughter
accepted the loans knowing the rate.

What I am saying is that the rates are too high, not that my daughter should not repay them. There is a difference.
 
The thing is this, the government took over $15,000 from my paycheck last year in the form of income tax. As such, I have the right to say that I think that the interest rates that they are charging on student loans are excessive. They are. The spread between the rates that they pay to borrow money and what they charge student loan customers is ridiculous. The purpose of the loans is not to tax student loan customers for the sake of profit with these rates. It is to facilitate education.
Look I apologize for being terse, and I am sorry you Daughter is having trouble.
The market forces have been removed from the education system,
most likely from the original student loan system.
There should be feedback between the degrees offered, and the potential jobs capable
of making the degree worthwhile. Unfortunately those elements got disconnected
when college became about discovering yourself rather then preparing for a career.
This is even further offset by the federal government administrating the loan program.
This should be done by the states, with loans only given for the types of jobs available in that state.
 
Well it is a practical way to cover such costs. I paid for her first two years of school and paid the room and board for the third. What they charge for tuition now is more that ten times what I paid when I was in school. It is ridiculous.

I agree that costs have soared way above inflation (and government sponsorship of student loans is the key driver behind that), however, I don't think that makes student debt a "practical" way to cover costs if you are not then going to be in a job field where you can rapidly and fairly easily pay off the debt incurred - such as if you are a doctor. Go in-state, get scholarships, work and save, and you can go to school without debt. College students who have jobs on the side actually do better grade-wise, because they have skin in the game.

We don't have a society that is structured on Biblical principles.

"Society" is irrelevant. Believers are expected to try to live our lives along biblical principles. When it comes to money, this means (among other things) avoiding debt. That doesn't make debt inherently sinful, mind you, it makes it dangerous, debilitating, and dumb.

If we did, we would not do things like bomb innocent people to usurp the resources of their country.

Times have changed. Like I said, tuition costs are more than ten times what it cost me when I was in school.

You are letting sticker shock short-circuit your logic functions. I have been attending undergrad and graduate school from 2001 - Present, with some gap in the middle. Times haven't changed to require student debt.
 
Look I apologize for being terse, and I am sorry you Daughter is having trouble.
The market forces have been removed from the education system,
most likely from the original student loan system.
There should be feedback between the degrees offered, and the potential jobs capable
of making the degree worthwhile. Unfortunately those elements got disconnected
when college became about discovering yourself rather then preparing for a career.
This is even further offset by the federal government administrating the loan program.
This should be done by the states, with loans only given for the types of jobs available in that state.

It is not that my daughter cannot repay the loan. It is that I don't think the interest rate should be so high.
 
I agree that costs have soared way above inflation (and government sponsorship of student loans is the key driver behind that), however, I don't think that makes student debt a "practical" way to cover costs if you are not then going to be in a job field where you can rapidly and fairly easily pay off the debt incurred - such as if you are a doctor. Go in-state, get scholarships, work and save, and you can go to school without debt. College students who have jobs on the side actually do better grade-wise, because they have skin in the game.

My daughter can repay the loan. The interest rates are too high.


"Society" is irrelevant. Believers are expected to try to live our lives along biblical principles. When it comes to money, this means (among other things) avoiding debt. That doesn't make debt inherently sinful, mind you, it makes it dangerous, debilitating, and dumb.

My daughter is capable of repaying the debt, has a job making north of $50,000 a year, and is repaying the debt. It is not sinful to borrow money, what is sinful is not repaying it because that is stealing, and usury, which is charging excessive interest rates.
 
The thing is this, the government took over $15,000 from my paycheck last year in the form of income tax. As such, I have the right to say that I think that the interest rates that they are charging on student loans are excessive. They are. The spread between the rates that they pay to borrow money and what they charge student loan customers is ridiculous. The purpose of the loans is not to tax student loan customers for the sake of profit with these rates. It is to facilitate education.

dude

you act like paying 15k is something special

i would surmise that is probably around the average tax bill for middle class americans

you can say anything you like

you can bitch and moan all you like

there is an old saying, **** in one hand and wish in the other....see which one fills up faster

there are remedies for what you call higher interest rates.....

you dont want to hear about them

you want the government to give your daughter basically free money

sorry....but no
 
It is not that my daughter cannot repay the loan. It is that I don't think the interest rate should be so high.
Without the government involvement, what do you think would be a fair market interest rate
for a student loan? not your daughter, but any student?
You do not know , what they are majoring in, weather they will finish, what kind of study habits they have.
It is truly an unsecured loan.
 
Ok, so what should the interest rate be?
 
It appears that you are complaining. Perhaps if you don't have anything of substance to say, you should exercise some restraint.

Keep me out of your issues. You brought your daughter into the discussion and I asked a question about whether you discussed collateral and you have yet to address the question.

I'll leave to to Tres to continue to point out your complaints.
 
Again, your reasoning in flawed. You don't have to pay sales tax if you don't buy anything that is taxable.

Sales tax and property taxes are compulsory for property owners and purchasers of goods. You cannot avoid them if you own property or buy taxable items. You can easily avoid paying interest on student loans. Just don't take one out and finance your education by other means.
 
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Of course it's not. 6% is not a high interest. If you want a high rate of interest, pay your college on a credit card at 22%. People need to stop whining.
 
Without the government involvement, what do you think would be a fair market interest rate
for a student loan? not your daughter, but any student?
You do not know , what they are majoring in, weather they will finish, what kind of study habits they have.
It is truly an unsecured loan.

The government has massive resources at its disposal that private lending institutions do not have. It has the power to directly garnish wages in case of default, and there is the power of its empowered representative the Federal Reserve. Therefore, the loans should not be viewed as a government revenue source, but rather a tool to facilitate the higher education needs of citizens.
 
Keep me out of your issues. You brought your daughter into the discussion and I asked a question about whether you discussed collateral and you have yet to address the question.

You decided to come into the discussion and say charge the expenses to a credit card in a nasty way. As such, it would be nice if you practiced some restraint if you don't have anything substantial to put forward.

I'll leave to to Tres to continue to point out your complaints.

Good, your lame posts and along with her lame posts waste bandwidth.
 
Sales tax and property taxes are compulsory for property owners and purchasers of goods. You cannot avoid them if you own property or buy taxable items.
You don't have to buy anything or purchase property. It can be done and their are people who do it.

You can easily avoid paying interest on student loans. Just don't take one out and finance your education by other means.

Again, if you look at it like that you can easily avoid buying property or anything that is taxed.
 
Of course it's not. 6% is not a high interest. If you want a high rate of interest, pay your college on a credit card at 22%. People need to stop whining.

You need to stop whining about someone making the observation that the interest rate that the government is charging on student loans is too high.
 
Ok, so what should the interest rate be?

It should be at the rate the government pays to borrow money, possibly a little north of that to cover servicing costs.
 
You need to stop whining about someone making the observation that the interest rate that the government is charging on student loans is too high.

Then by all means, don't take out a student loan. Solve the problem for you. :roll:
 
Then by all means, don't take out a student loan. Solve the problem for you. :roll:

By all means, the government should stop charging such high interest rates.
 
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