• 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 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

MildSteel

Banned
DP Veteran
Joined
Mar 5, 2014
Messages
4,974
Reaction score
1,047
Gender
Male
Political Leaning
Undisclosed
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.
 
If interest rates go down, tuition will go up.

If anything is a tax on the "middle class", its tuition rates - if they were lower, even higher interest rate loans wouldn't be as onerous.
 
Tax and loan are two entirely different things. 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.
 
Tax and loan are two entirely different things.

If the government is profiting from the spread in interest rates, it is a source of revenue for the government and as such is, in effect, a form of taxation.
 
Last edited:
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.

no, it's clearly not a tax on the middle class.

by that, I mean it's clearly not a tax at all.
 
Tax and loan are two entirely different things. 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.

rates wouldn't make my top 1000 either.... overall college cost would be top 10 in my book, though.
 
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.

Equivocating loans and taxes is essentially moronic, period.

If you want to point a finger, try the colleges themselves and their over-hiring of administrators (leading to higher tuitions).

Other than that, get good ****ing grades, be active, be of service to others, and when all that is said and done, apply for scholarships :shrug:
 
Equivocating loans and taxes is essentially moronic, period.

What is moronic is ignoring that the average student indebtedness is over $28000 for students today. Students who recently graduated like my daughter face the task of repaying student loan debt. Of course people who are either too old or wealthy think that this topic is irrelevant. But to the many students facing this task, it is essentially a tax that is eroding the middle class.
 
What is moronic is ignoring that the average student indebtedness is over $28000 for students today. Students who recently graduated like my daughter face the task of repaying student loan debt. Of course people who are either too old or wealthy think that this topic is irrelevant. But to the many students facing this task, it is essentially a tax that is eroding the middle class.

The problem is not with the student loans, it is the tuition costs that the loans are taken out to pay. US tuition is insane, I know many Americans at my university who came here because of the ridiculous tuition rates, my tuition is limited to $8000/year by the Canadian government and international students only pay maybe a few more thousand.
 
Absolutely. They aren't forgiven with bankruptcy, can be taken out of federal tax returns and if deliquint the government can remove professional licenses. If anyone making an income pays back their loans the gov is going to profit from the 6%+ interest rates. If I take out the 20 year repayment plan they'll make almost double what I took out.

Not to mention after 75k income (I believe) your interest on the loans are no longer tax deductible. I believe they view them as a form of revenue for the government, not necessarily a public service to students.
 
The problem is not with the student loans, it is the tuition costs that the loans are taken out to pay.

The interest rates are too high. Again my daughter's student loan interest rate IS MORE THAT DOUBLE the interest rate on her car loan.
 
Absolutely. They aren't forgiven with bankruptcy, can be taken out of federal tax returns and if deliquint the government can remove professional licenses. If anyone making an income pays back their loans the gov is going to profit from the 6%+ interest rates. If I take out the 20 year repayment plan they'll make almost double what I took out.

Not to mention after 75k income (I believe) your interest on the loans are no longer tax deductible. I believe they view them as a form of revenue for the government, not necessarily a public service to students.

I don't think the 75k statement is true.
 
The interest rates are too high. Again my daughter's student loan interest rate IS MORE THAT DOUBLE the interest rate on her car loan.

If tuition was reasonable those loans may not to have to be taken in the first place or a smaller amount will need to be borrowed. Tackle the root of the problem not the symptom.
 
If tuition was reasonable those loans may not to have to be taken in the first place or a smaller amount will need to be borrowed. Tackle the root of the problem not the symptom.

If you want to look at it that way, the problem is the system of fractional reserve banking.
 
If the government is profiting from the spread in interest rates, it is a source of revenue for the government and as such is, in effect, a form of taxation.

Revenue != tax. You seem really confused about what taxes are.
 
What is moronic is ignoring that the average student indebtedness is over $28000 for students today. Students who recently graduated like my daughter face the task of repaying student loan debt. Of course people who are either too old or wealthy think that this topic is irrelevant. But to the many students facing this task, it is essentially a tax that is eroding the middle class.

And a college degree increases average wages about 900k to 1 million over a lifetime. Maybe it is time to stop crying and actually be thankful for such programs.
 
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.

It's a representation of risk. If she fails to pay her car loan they repossess her car, and get some of that money back. If she fails to pay her student loan (which is probably more likely) they have no financial recourse.
 
Revenue != tax. You seem really confused about what taxes are.

It is not that I am confused, rather it is that your understanding is shallow. Not only that but you likely have a personal grudge that you bring to the discussion. But that aside, one way that the government gets revenue is from taxing its citizens. Therefore, if the government is profiting from such loans, they can be viewed effectively as a tax.
 
It's a representation of risk. If she fails to pay her car loan they repossess her car, and get some of that money back. If she fails to pay her student loan (which is probably more likely) they have no financial recourse.

Wrong!!! The government has very strong recourse in the form of wage garnishment.
 
And a college degree increases average wages about 900k to 1 million over a lifetime. Maybe it is time to stop crying and actually be thankful for such programs.

Perhaps it is time to stop being so callous about the practical situation that many young graduates face, and think about what will help, instead of eroding middle class purchasing power. What you have ignored is that real wages have stagnated in recent years. Therefore adding the burden of excessive interest rates does not help the middle class, but hurts it. The resulting decline in middle class purchasing power does not help the broader economy. Like I said, people who are too old and wealthy will likely be insensitive to this issue. However it is quite a significant challenge that young people must face today.
 
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.

So during this discussion, did the topic of collateral come up?
 
So during this discussion, did the topic of collateral come up?

The purpose of the loans in to facilitate education, not to create a source of revenue for the government. Over and above that, the government has an effective means of protection in case of default in the form of wage garnishment. As such, there is no need to charge excessive interest rates.
 
Last edited:
The purpose of the loans in to facilitate education, not to create a source of revenue for the government. Over and above that, the government has an effective means of protection in case of default in the form of wage garnishment. As such, there is no need to charge excessive interest rates.

So I'm left with the impression that collateral did not come up. Maybe you should just charge your education on a credit card and then you will have a lot more complaining to do.
 
Back
Top Bottom