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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
Geoist said:
So then sales tax isn't a tax?
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Yes it's a tax. You are forced to pay it if you buy something and buying things is as a practical matter unavoidable. You are forced directly to pay property taxes if you own property and indirectly if you rent. You are similarly forced to pay interest on a Federally guaranteed student loan if you take one out but you are not forced to take out student loans to finance your education. You have many other alternatives. That is a significant difference and what at heart makes interest on student loads not a tax.

And don't construe any of that to mean that I think student loan interest rates aren't too high - I have no opinion on the matter. I'm simply saying it isn't a tax given the normal usage of the term.
 
Gaius46 said:
Yes it's a tax. You are forced to pay it if you buy something and buying things is as a practical matter unavoidable. You are forced directly to pay property taxes if you own property and indirectly if you rent. You are similarly forced to pay interest on a Federally guaranteed student loan if you take one out but you are not forced to take out student loans to finance your education. You have many other alternatives. That is a significant difference and what at heart makes interest on student loads not a tax.

And don't construe any of that to mean that I think student loan interest rates aren't too high - I have no opinion on the matter. I'm simply saying it isn't a tax given the normal usage of the term.
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You know our economy's in trouble when people argue that college students are being gouged and taxed to death because the subsidies they receive don't reduce the interest rates they pay to the point that they're on par with rates paid by the federal government. :roll:
 
Cephus said:
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.
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Ah, so Department of Ed should be profiting more than $40 billion from student loans?

The hypocrisy of conservatives makes me chuckle.
 
SMTA said:
And if you don't like the interest rate, don't get the loan. Problem solved.
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If you don't like President Obama then just move to another country.


See how productive that argument is? :roll:
 
Geoist said:
Ah, so Department of Ed should be profiting more than $40 billion from student loans?

The hypocrisy of conservatives makes me chuckle.
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They can do what they want to do. You can choose to take advantage of the offer made or go elsewhere.
 
Gaius46 said:
Yes it's a tax. You are forced to pay it if you buy something and buying things is as a practical matter unavoidable.
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You don't have to buy anything. Some people get along fine with the simple non-consumerist living.
 
Geoist said:
Ah, so Department of Ed should be profiting more than $40 billion from student loans?

The hypocrisy of conservatives makes me chuckle.
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The way I understand it the $40 billion is used to administer the loans
and provide funding for the Pell grants for low income students.
 
Gaius46 said:
I have no opinion on the matter.
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So you don't think its ridiculous that Dept. of Ed is profiting $40 billion each year from student loans? Would think a libertarian would have a strong opinion on such a matter...
 
Cephus said:
They can do what they want to do. You can choose to take advantage of the offer made or go elsewhere.
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Go elsewhere? I'm sorry, but not going to college was absolutely not an option in my family.

And, no they cannot simply "do what they want to do." This is a democracy, not a dictatorship. And there is a movement within govt and outside govt to lower those interest rates.
 
Geoist said:
Ah, so Department of Ed should be profiting more than $40 billion from student loans?

The hypocrisy of conservatives makes me chuckle.
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no....the department of education SHOULDNT EXIST

education should be a state matter

and if you want a loan to go to school, then you go to a bank, a credit union, or your relatives

giving out loans to people or businesses is not the role of the feds
 
longview said:
The way I understand it the $40 billion is used to administer the loans
and provide funding for the Pell grants for low income students.
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And in the meantime saddle your young middle class with debt.

That is one way to cripple a society.
 
Geoist said:
And in the meantime saddle your young middle class with debt.

That is one way to cripple a society.
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It is a socialist dream, have those who can afford to pay, pay for those who cannot!
 
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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Oh, I don't think so. I am a big supporter of Kiva.org making hundreds of small $25 loans to people around the world. My money gets combined with others to fund projects that people want to have. I don't get any money from my loan but the institution making the loan charges a rather high %. Perhaps 25% or more. Some people think that this is wrong. But the borrowers want the money to make some money and without the interest the loan would not be made. I have lost money when a borrower defaults.
But when people want/need money they don't have to get it unless someone is willing to take a chance on them. Lenders lose when borrowers don't repay. Reality bits. Don't borrow if you don't want to pay the interest. And probably college is a bad or terrible investment for many. Sorry. If you aren't academically smart and don't have good career prospects don't waste your money.
 
gdgyva said:
no....the department of education SHOULDNT EXIST

education should be a state matter

and if you want a loan to go to school, then you go to a bank, a credit union, or your relatives

giving out loans to people or businesses is not the role of the feds
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I agree that education should be a state matter.

And yet all these conservatives are defending Congress and the Dept of Ed. for an interest rate that is generating tens of billions in profits each year.

Utter hypocrisy.
 
Geoist said:
Go elsewhere? I'm sorry, but not going to college was absolutely not an option in my family.

And, no they cannot simply "do what they want to do." This is a democracy, not a dictatorship. And there is a movement within govt and outside govt to lower those interest rates.
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Go elsewhere for money. And no, it's not a democracy, it's a democratic republic. We elect people to do what we, in general, want. Maybe that's why you're so laughably wrong, you think this is a democracy.
 
Interest is a tax on stupidity.....
just another way of saying "those who understand interest collect it, those that don't pay it". Mark Twain, I think....

I would bet that many, if not most, of the student loans were to people whose parents could have helped their kids go to college but just chose not to.

The wife got her first 2 years paid for by her parents (and it was a financial hardship for them), then she married me and I paid the rest. GI Bill and my employer paid for my college.

We paid for our 2 kids to go to state universities, will pay for 7 grandchildren as well. Hopefully all 7 will get Masters Degrees or more.

Most of us can do it without loans, if we commit to it early and work at it until it is done....
 
Geoist said:
Go elsewhere? I'm sorry, but not going to college was absolutely not an option in my family.

And, no they cannot simply "do what they want to do." This is a democracy, not a dictatorship. And there is a movement within govt and outside govt to lower those interest rates.
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So then your family should pool your money and fund everyone's college education, or take a loan at a lower interest rate elsewhere.
 
Geoist said:
You don't have to buy anything. Some people get along fine with the simple non-consumerist living.
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The don't buy clothes? Or the means to make clothes? Or food? You cannot avoid sales taxes unless you live in a tent in the woods.
 
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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Or just don't go to college. It's a horrific waste of money anyway.
 
MildSteel said:
You and I have a very big disagreement on this. If it were a private lending institution that's ok. But the government should be facilitating education with such loans, not making money. Sorry, I don't agree with you one bit on that.
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Government has no business nationalizing the student loan industry. If your daughter didn't want the government charging her interest, then she shouldn't have signed up for it's money at an agreed upon rate.

My daughter isn't in default and should not have to pay interest rates that are that high.
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Your daughter is in a high risk category, which is why her interest rate is where it is. If anything, technically, it should be higher. The reason her rate on the car is lower is because it is secured. They can repossess and resell the car. You can't reposses and resell a degree.

Although I think the tuition costs were too high, that is not what I am talking about here in this thread.
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:raises eyebrows: then what was all that about "student debt is practical because tuition is so high" about?

Neither I am talking about the fact that she incurred debt to get her education. What I am saying is that the interest rate that the government is charging on the loans is too high. And that is where you and I have a big disagreement because we don't agree on the purpose of the loans.
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Well, yeah. If you think that the purpose of taking out a loan is to get subsidized, then I agree, that's a disagreement we are going to have. If the interest rate was higher than she was willing to pay, then she shouldn't have signed up for it. :shrug:
 
cpwill said:
Your daughter is in a high risk category, which is why her interest rate is where it is. If anything, technically, it should be higher. The reason her rate on the car is lower is because it is secured. They can repossess and resell the car. You can't reposses and resell a degree.
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Which is exactly the point I was going to make before it became painfully obvious I was wasting my time on the entitlement-happy . With a 9% default rate on student loans and nothing the banks can really do to recoup a defaulted loan, they have to charge more money to off-set the losses that they receive. Then again, some people just don't know how economics works.
 
Geoist said:
So you don't think its ridiculous that Dept. of Ed is profiting $40 billion each year from student loans? Would think a libertarian would have a strong opinion on such a matter...
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Having not looked into it I have no idea whether that's a real number or something someone pulled out of their backside. Hence I have no opinion. I'll stipulate that if it's a real number that yes I'd have a problem with it. I don't necessarily have an issue with the government providing services but it should be services of the "last resort" variety and not profit driven. Government can't compete in the free market.
 
Geoist said:
If you don't like President Obama then just move to another country.


See how productive that argument is? :roll:
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Completely irrelevant to the discussion at hand.
 
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